Dutch Judge Blocks Sale of LaSalle Bank

Key deal between ABN Amro and Bank of America, paving way for ABN-Barclays combination, needs an ABN shareholder vote, the court rules.
Roy HarrisMay 3, 2007

A Dutch judge ruled it “unacceptable” for ABN Amro Holding to sell Chicago-based LaSalle Bank to Bank of America without a vote of ABN shareholders, throwing a wrench in the proposed $87.5-billion combination of ABN Amro and Barclays.

According to Bloomberg, Judge Huub Willems of the Amsterdam district court Enterprise Chamber supported a complaint that the Dutch investor group VEB had filed. “ABN Amro management has misjudged its task,” Judge Willems said in his ruling, according to the news service, adding that a bar on LaSalle’s sale, for $21 billion, will stand “until the shareholders have spoken their mind.”

On April 23, ABN had announced that it would be bought by Britain’s Barclays, with LaSalle being sold to Bank of America. VEB had said that shareholder approval was needed for the LaSalle sale, arguing that the transaction was designed to avoid an “unwanted bidding process” for ABN AMRO. Within days, a rival bidding group led by Royal Bank of Scotland Group announced that it would offer bids for LaSalle and for all of ABN Amro, together valued at about $98 billion.

Bloomberg quoted Colin Morton, a Leeds-based fund manager at Rensburg Sheppards who helps manage $1.8 billion and owns Barclays and Royal Bank stock, as saying: “Now that the sale of LaSalle has been deemed illegal, it is much more likely that Royal Bank will win the day. If it had been legally sewn up it would have been very difficult for the Royal Bank group.”

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