A Dutch Supreme Court boosted Barclays’ chances of success in its €64 billion (£43.4 billion) bid to buy ABN Amro as it ruled that a controversial side sale of the Dutch bank’s coveted American arm LaSalle can go ahead without a shareholder vote.
Today’s ruling means a rival consortium led by Royal Bank of Scotland will have to go back to the drawing board to consider whether to revise the terms of its own proposal to buy ABN.
RBS, joined by Fortis and Santander had been prepared to pay €71 billion for the Dutch bank, including LaSalle. It has previously signalled its willingness to revise the terms of its offer.
RBS made no immediate comment in the light of the ruling. However, if it returns to the fray, also sets the stage for a head-on battle with Barclays for ABN on equal terms.
The European banks team at Keefe, Bruyette & Woods said of the Court decision: “This results in a more level playing field for Barclays and the RBS-led consortium competing for ABN Amro (on revised terms ex-LaSalle.”
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The court said that it had “dismissed irrevocably” an earlier interim junction blocking the LaSalle deal that was put in place in May by a lower court.
“The Supreme Court holds that there are no grounds for granting the requested interim injunctions. It sets aside the judgment of the Enterprise Chamber and dismisses the requested interim injunction,” it said.
The deal was cast into uncertainty after VEB, a Dutch shareholder lobby group, succeeded in freezing the sale through the lower court, or Enterprise Chamber, with its demands that ABN shareholders should have a vote on the best available offer.
Barclays can now proceed with its formal offer for ABN Amro, which was contingent on the successful sale of LaSalle to Bank of America for $21 billion, struck at the time of Barclays’ agreed merger deal with ABN Amro in late April.
John Varley, the chief executive, said: “We are pleased to see the Supreme Court has made a very clear ruling. The ruling is consistent with the legal advice which we have had over time. The ruling is definitive and therefore removes uncertainty from the situation, which is good for ABN Amro customers and employees.”
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Shares in Barclays rose 2p to 720.5p in the wake of the ruling. RBS added 5.5p to 640p.
Bidders were on tenterhooks this morning ahead of the decision by Hans Fleers, the Supreme Court judge. Although the bare bones of the ruling emerged shortly after the judge began reading, an army of lawyers is expected to be involved.
The judge is thought likely to have been swayed by a surprise advisory judgment by Dutch advocate general Professor Levinus Timmerman, who suggested that no vote was necessary.
The judge’s ruling boosts Barclays but represents a setback to a rival consortium led by Royal Bank of Scotland.
RBS stands to gain ABN Amro’s wholesale and investment banking division, together with retail banking operations in Asia and Latin America. Fortis would collect ABN’s domestic retail bank and its insurance business and Santander would get its Brazilian arm and Italian banking division Antonveneta.
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Barclays would be transformed into a top-five worldwide banking player. However, it has been suggested that if it fails it is vulnerable to a takeover.
Barclays’ shares stood 6p higher at 724.5p ahead of the ruling. RBS rose 7p to 641.5p.
