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Royal Bank of Scotland consortium to launch public bid for ABN Amro

The consortium led by Royal Bank of Scotland (RBS) announced Friday that it plans to launch a public bid for ABN Amro as soon as possible, the Dutch daily Financieele Dagblad reported.

The group, which also includes Belgian-Dutch bank Fortis and Banco Santander of Spain, already informed the executive and supervisory boards at ABN Amro on Thursday that they wanted to bid on all issued and outstanding shares of the bank and invite talks on this as soon as possible. A spokesperson for Royal Bank of Scotland said the announcement is purely to satisfy legal requirements. Under Dutch law, a group must make an official announcement if it plans to make a bid. „We want to bid on the whole group, including LaSalle, so that is why want to do things quickly,” said the spokesperson. Parties interested in buying the US subsidiary LaSalle have until May 7 to bring out a bid. The banks „continue to believe that their proposals offer materially higher value for ABN Amro's shareholders and benefits to customers and employees compared with the recommended offer from Barclays,” they said in a joint statement Friday.

The consortium on Wednesday offered €39 ($44) a share for ABN Amro, 70% in cash and 30% in shares in RBS. The offer was 13% more than the offer announced by British bank Barclays on Monday, and more attractive to ABN shareholders. However, the ABN Amro executives prefer Barclays' bid, saying Barclays will keep the bank's core business intact, while the consortium led by Royal Bank of Scotland will split up the bank. The crucial point now is the proposed sale of ABN Amro's US subsidiary LaSalle to Bank of America, which ABN Amro announced on Monday. The decision to sell LaSalle is seen as a tactic to deter the consortium's bid.

The consortium of three banks is only willing to officially bid on ABN Amro for €39 a share if plans to sell LaSalle are scrapped. At the ABN Amro shareholders' meeting on Thursday, four motions initiated by hedge fund TCI, which advocates a breakup of ABN Amro, were approved by a majority. The shareholders' support is a strong indication that they are not happy with the bank management's plans to head for a takeover by Barclays and has increased pressure on the bank to give parties other than Barclays a better chance. No matter which bank or banks succeeds in a takeover of the Dutch bank, it would be the biggest transaction in European banking history. (