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A Dutch court ruled yesterday that ABN Amro must freeze its US$21 billion ($29 billion) sale of US unit LaSalle, allowing a group of suitors to bid for the whole of ABN and scupper an agreed takeover by Barclays.
ABN, which has until June 14 to appeal, had argued the sale of LaSalle to Bank of America was not a "major transaction" requiring approval, as it amounted to less than a third of the bank's total value.
But the commercial court in Amsterdam said the deal should be put to shareholders, as should any other decision to sell the entire bank or parts of it.
The notice period needed for a shareholders' meeting means the sale could now be on hold for over a month.
The sale of LaSalle was agreed last week alongside Barclays' proposed US$90 billion takeover of ABN.
But Royal Bank of Scotland, Spain's Santander and Belgian Dutch Fortis have indicated that they are willing to table a higher bid for the group - as much as US$98 billion - if LaSalle remains part of ABN Amro.
Analysts said the decision gave the RBS-led consortium more time to put together a bid - as the May 6 deadline on counterbids for LaSalle would apparently no longer stand - but most said they still expected an offer within days.
The decision to freeze the LaSalle sale and consider an investigation into the decision processes behind it is a clear blow for ABN's chief executive, Rijkman Groenink, who had backed the Barclays bid - an offer he said would build and not break up the Dutch bank.
Peter Paul de Vries, chairman of shareholder group VEB which filed the suit over the LaSalle sale, said he expected Groenink to be replaced within a day: "Groenink is not the person who should lead this process or be CEO of the bank."
Activist hedge fund TCI, whose campaign to break up ABN earlier this year accelerated the takeover battle, welcomed the court decision, and also refreshed its call for the supervisory board to sack Groenink and to take control of the bank's sale.
A legal battle, however, now seems inevitable. Bank of America has already said it could take legal action over LaSalle - in addition to a potential US$200 million breakup fee it would receive - and Barclays could also seek compensation if its deal flounders.
ABN Amro shares closed up 1.9 per cent after the ruling at €36.6 ($67.50) - below RBS's proposed €39 a share but above the €35.8 a share value of a Barclays bid.
Barclays shares ended the day up 3 per cent.
"It wasn't the greatest deal for them, and people weren't sure on the cost synergies," Tania Gold, an analyst at Dresdner Kleinwort in London, said.
Barclays said it would continue to pursue its takeover plan.
- Reuters
