Dutch Court Clears the Way for LaSalle Sale to Bank of America: What's Next for The Key Players?

Implications: Implications: In less than 30 minutes the Dutch court ruled that the sale of LaSalle Bank to Bank of America for $21 billion does not require a shareholder vote and can move forward. Additionally, it threw a sharp blow to the shareholder group, VEB who originally filed suit to block the sale, stating no mismanagement occurred by ABN's management. LaSalle accounted for about 15% of the Consortium's synergies and even without LaSalle, RBS is interested in ABN's investment banking operations and the rest of its global operations, which are unclaimed by Fortis and Santander. Also, there may be underlining issues that could shift this deal again with players Barclays and RBS shareholders, who's Top 10 shareholders hold 21% of RBS & 24% of Barclays and who don't want a bidding war to ensue. Without LaSalle, RBS has to convince its shareholders the deal is still in their best interest and after the institutions assess rival offers they will persuade one bank to withdraw.   

Analysis: Comments/Perspective:

Barclays is one step closer in becoming the world's fourth largest retail and commercial bank and 5th largest investment bank with the Dutch Court's ruling, which indicates that LaSalle Bank can be sold to Bank of America without a shareholder vote.  The Courts also ruled the LaSalle deal was not an anti-takeover measure and dampens the hopes of the Consortium for LaSalle Bank and may provide ABN's management with a bit of a buffer when they face charges in New York by VEB, the shareholder group, who has filed suit accusing ABN executives of breaching their fiduciary duties.

1.  The Consortium must concede the loss of LaSalle Bank, however, there are strong incentives for the Consortium not to modify the current offer structure too much and put their "Plan B" in motion, to move forward minus LaSalle Bank and bid for the rest of ABN's Operations at a lower bid and perhaps up the cash portion and outbid Barclays by the July 23, 2007 looming deadline, which doesn't give either side much wiggle room

2.  Fortis was very busy this week raising its portion of the Consortium's offer and sold its stake in CaiFor and its stake in SegurCaixa, however, Fortis' shareholders may not agree to the large share offering and chances may be increasing that the Consortium may break up since the court's ruling favors Barclays. Fortis' rights issues has also been under scrutiny because it represents about one-third of Fortis' market value and with so many shares being issued and the potential execution risks, Fortis' share price has dropped

3.  ABN's Investment Business may also become a bone of contention for Barclays and RBS, who have carved out leading positions in debt markets and syndicated loans and ABN's Wholesale Bank is active in over 50 countries and has a strong presence in emerging markets, which is why it may be an attractive piece of real estate to bid on

Barclays offer for the whole of ABN including LaSalle Bank and ABN's side deal with Bank of America to purchase LaSalle Bank virtually sealed the deal up so tight it made it extremely difficult for a rival to gatecrash the deal, which is why the deal was perceived as a "poison pill."  Stay tuned for more highlights of the world's largest financial services takeover.  The fat lady hasn't sung yet!