UPDATE 1-ABN AMRO faces suit to hold up BoA-LaSalle deal
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By Gilbert Kreijger and Mark McSherry
THE HAGUE/NEW YORK, April 26 (Reuters) - Dutch shareholders group VEB said on Thursday it will go to court to hold up the planned sale of ABN AMRO's U.S. retail bank LaSalle to Bank of America Corp. to give other banks a fair chance to make a bid for ABN AMRO.
VEB -- as well as hedge fund TCI, another ABN shareholder -- argue the Bank of America-LaSalle deal makes it difficult for other bidders to make an offer for ABN.
Bank of America Corp. (BAC.N) agreed to buy LaSalle from ABN for $21 billion in cash this week, in a deal related to Barclays Plc's (BARC.L) 65 billion euro ($88.5 billion) offer to buy ABN AMRO Holding NVAAH.AS.
Royal Bank of Scotland Group Plc(RBS.L), along with Spain's Santander (SAN.MC) and Dutch-Belgian bank Fortis(FOR.BR), have proposed a higher 72 billion euro counter-bid for ABN, but want LaSalle included.
"We will go to court and file a request tonight at the Commercial Court. We want a freeze of the sale of LaSalle," VEB Chairman Peter Paul de Vries told reporters after ABN AMRO's annual general shareholders meeting.
ABN has a clause in its agreement with Bank of America that allows it to offer LaSalle to other banks for a period of 14 days until May 6.
But Bank of America would win the right to buy Chicago- based LaSalle if it simply matches any bid higher than its current offer -- a right that some experts said is unusual.
De Vries expects the Dutch Commercial Court to come up with a quick ruling due to the 14-day deadline.
TERMINATE
ABN AMRO said on Wednesday it agreed to pay Bank of America a $200 million termination fee if it accepted by May 6 a higher all-cash bid that leads to a sale. Bank of America would then have five business days to match the new bid, ABN AMRO said.
"If Bank of America matches there is no further right to terminate the contract for a superior proposal," ABN AMRO said in a U.S. regulatory filing.
The Dutch bank said it is "actively engaged in soliciting alternative bids from the largest U.S. and international banks" that may want to buy Chicago-based LaSalle.
But some experts said potential bidders may be put off making an offer for LaSalle in the knowledge Bank of America only has to match their offer to win LaSalle.
Bank of America said on Wednesday it has a legal contract to acquire ABN AMRO North America Holding Co. and expects that contract to be fulfilled under its current terms.
One legal and securities expert, Columbia University Law School Professor John Coffee, said the Barclays-ABN and Bank of America-LaSalle agreements highlighted some differences between the M&A processes of the United States and Europe.
Asked for his observations of the agreements, Coffee said: "Put it this way, this is a major issue from the standpoint of Delaware corporate governance, but Europe ... has always been less committed to maximizing value for shareholders.
"And it (Europe) has a greater interest in protecting the balance of corporate constituencies."
On the Bank of America-LaSalle deal in particular, he said: "They are selling a crown jewel. It's one of the age-old tactics ... I could see someone arguing that this is a defensive tactic that violates the applicable legal standards.
"The problem is we are not sitting in the Delaware Chancery Court, because ABN is not a Delaware corporation."
