Royal Bank of Scotland certainly looks to be hostile. The consortium lead by Royal Bank of Scotland said that it is ready to make an unsolicited offer for the entire ABN AMRO bank. In essence, they were already hostile, so the fact that the said that they were going to take this directly to the shareholders is no surprise.
Is the gorilla in the room still LaSalle Bank?
There is an interesting situation developing here that we could perhaps point out that fact that we could have another consortium coming up, if Bank of America is not happy with the situation. If they want to secure the opposition, they may want to start their own consortium. There are possible implications. LaSalle Bank does create an interesting point. Most of the best legal experts in the world are looking at the contract of the sale of LaSalle Bank, going through the details to see what is possible, what can they do in these circumstances.
So the question is how difficult of a position could the shareholders of ABN AMRO be be in?
On the one hand they are going to legally block the sale but voted to break up the bank on Thursday and at the same time you have Bank of America saying that they have a contract that is bullet proof to buy it. This will have to be decided by the courts unless multiple side back down.
Typically courts are slow most time but this particular court is quite rapid. In this case there is a famous judge that is world recognized and appreciated in the business community; therefore the court case will be in very good hands for fair judgment. It will be faster and all parties involved have an interest in not being entangled in court cases.
So everyone is wondering, how will this Barclay deal play out? Is there really the possibility of another consortium coming forward? How will this end?
For the moment the market is giving it 50/50% chance to both the Barclays offer and to the consortiums offer. It is difficult to judge who will win given the legal complications. It is also possible for Bank of America to get annoyed with the situation and it could consider contacting some of their associates in the US and Europe and build an equivalent to what Royal Bank of Scotland is doing. This acquisition has global implications, not just Europe.
When can we expect to see some conclusion?
We have an acceleration factor here due to the fact that the current contract for the sale of LaSalle Bank has a 14 day chance for a counter offer from initial contract, therefore there is pressing time issue. That fact alone points to an accelerated process.Being a complicated acquisition, regardless of the outcome the earliest most economists and industry experts are seeing is an outcome by the end of 2007.
Will Royal Bank of Scotland go for LaSalle Bank directly if their consortium does not get the ABN AMRO acquisition?
They could have already done that. Due to the fact that they have started the consortium shows that they feel that this avenue offers the best value for all the parties involved and for the shareholders of ABN AMRO. So the fact that they have not singled out LaSalle Bank is a very good indicator they believe the consortium has a very good chance of success.
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Tags: ABN AMRO, Bank Of America, Barclays Bank, LaSalle Bank, Mortgage News, Royal Bank of Scotland
