RBS poised as court blocks LaSalle sale

MOVES by the Royal Bank of Scotland-led consortium to take over ABN Amro were boosted yesterday when a court blocked the Dutch bank's sale of its US business, LaSalle.

The RBS consortium is now expected to put in a bid for LaSalle, conditional on its parallel takeover of ABN Amro, between now and this Sunday.

Sunday midnight was the previous deadline for the completion of the $21 billion (10.5bn) sale of the Chicago-based subsidiary to Bank of America by which other rival bidders for La Salle had to make offers.

The verdict from the Dutch Enterprise Chamber follows a legal move from shareholder rights group VEB to halt the LaSalle sale.

It is thought the RBS consortium still wants to move in the next few days as there is the continuing threat of legal action from BoA and other complexities following the Dutch court's ruling.

RBS said last night that it noted the court's decision "and awaited ABN's response".

Mark Sartori, head of sales and trading at broker Fox, Pitt-Kelton, said the Dutch court judgment meant "the RBS consortium is back in play".

Bank of America said: "We are reviewing the judge's decision and do not have any other immediate comment."

The Dutch court decision opens the way for Bank of America to get a $200 million break-fee if it now does not win control of LaSalle. In addition, the American bank had previously threatened a $220bn lawsuit against ABN if the LaSalle deal was scuppered.

The commercial court in Amsterdam said the LaSalle deal should be put to shareholders, as well as any other decision to sell the bank or parts of the bank.

A spokesman for ABN said: "ABN Amro notes the judgment of the Enterprise Chamber in Amsterdam and will study the implications of the outcome."

At issue was whether ABN's sale of LaSalle could be considered a "major transaction" requiring shareholders' approval - normally deemed in Dutch law to be a deal worth 33 per cent of the group's stock market value. LaSalle's value is well under 25 per cent of ABN's market capitalisation.

Completing the sale to BoA was a condition of Barclays' proposed 63.26bn takeover of ABN.

But RBS, Spain's Santander and Belgian-Dutch Fortis had indicated that they were willing to pay more - as much as 72bn - if LaSalle remained part of ABN.

VEB had asked the court for an injunction against the sale, arguing that the transaction was a "poison pill" making rival bids for ABN difficult.

However, it appears the Dutch court did not agree the sale was a poison pill.

One source said: "The other criteria for whether a deal should go to shareholders apart from the size is whether it fundamentally changes the character of the bank.

"The LaSalle sale was announced as part of the wider sale of ABN to Barclays, and it is the latter that changes the character of the bank.

"You could argue, by contrast, that if LaSalle had been sold by itself six months ago, and not as part of the more transformational Barclays deal, nobody would have batted an eyelid at it not being referred to shareholders."

Barclays said in a statement to the British stock market after it had closed that, while it noted the judgment in Amsterdam, it was "continuing to pursue its recommended merger with ABN Amro which offers significant value to shareholders".

The Childrens Investment Fund, the hedge fund that has agitated for an open auction for ABN and a break-up of the group, welcomed yesterday's court ruling.

TCI, which helped spark ABN's takeover talks by putting high-publicity pressure on the bank's management, said the decision was "an essential step in rectifying a flawed sales process and is consistent with what shareholders voted for at last week's [ABN] AGM".

Fortis plans to use 10bn shares issue

FORTIS is expected to raise a massive 15 billion (10bn) via one of the world's biggest-ever issues of new shares to investors to help bankroll its slice of the consortium's bid for ABN Amro, writes Martin Flanagan.

Analysts say Santander may also do a major rights issue, along with certain asset sales, although it is now widely thought RBS will not need to seek fresh funds from shareholders for any deal.

Fortis's rights issue may well equate to about a quarter of its current stock market value, but analysts still believe that, strategically, the acquisition of ABN's Benelux business alongside its asset management and private banking arms would be a good move by the Belgian bank.

Patrick Casselman, a fund manager with KBC, who manages 25 million of Fortis shares, said the size of the rights issue meant there would be some pressure on its shares in the short term.

But Casselman added: "There is good complementarity [between Fortis and ABN], so I think they should try to do this. Strategically, it makes sense, so investors will be interested in the new group."

Another analyst said the deal represented "a once-in-a-lifetime opportunity".

Fortis's shares fell 1.5 per cent in trading late yesterday afternoon.