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April 24, 2007 11:30 pm

ABN looks for counter-bidders in LaSalle sale

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ABN Amro has begun contacting potential counter bidders for LaSalle, the US bank that the Dutch lender on Monday agreed to sell to Bank Of America for $21bn in cash.

The Dutch bank has contacted eight of the largest US and international banks which it believed might have been keen on LaSalle, two of which expressed interest, according to people familiar with the situation. They did not name the two.

Under the terms of its contract with Bank of America, ABN was required actively to solicit rival interest in LaSalle under a 14-day “go shop” provision which ran from Monday, in order to ensure it got the best price.

A higher bidder would be required to complete a definitive sale agreement, after which Bank of America would have the opportunity to match the superior offer. If it chose not to, Bank of America would receive a $200m fee from ABN.

The development came as a rival consortium of European banks waited for further details of ABN’s contract with Bank of America, chiefly the terms on which the LaSalle deal might be terminated.

That contract is central to plans by the consortium, led by Royal Bank of Scotland, to launch a break-up bid for the Dutch lender. It believes it can offer more for ABN Amro than the agreed €66bn bid by British bank Barclays, but views LaSalle as an integral part of any deal.

ABN faces growing discontent from its shareholders about the way in which the sale has been handled. Though most investors acknowledge Bank of America paid a high price for LaSalle, they suspect the sale was at least partly designed to frustrate the RBS-led consortium.

Meanwhile, analysts on Tuesday continued to question the terms of Barclays’ offer and the €2.8bn cost savings the bank believes it can make from the combined group.

Shares in Barclays closed down almost 3 per cent at 712.5p, and valuing its offer for ABN Amro at about €34.31 per share, including a final dividend of €0.60. ABN Amro shares closed down 2 per cent at €35, suggesting that investors still believe there is some chance of a higher offer emerging.

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