ABN Amro is encouraging a Royal Bank of Scotland-led consortium and Bank of America to resolve their dispute over the ownership of its US subsidiary in an effort to end the legal confusion surrounding the takeover battle for the Dutch lender.
The RBS consortium last week held discussions with BofA on a deal that would see them carve up ABN Amro’s US division, LaSalle.
Though the talks broke down, ABN Amro is keen for the discussions to resume because it sees a deal as the best way of avoiding an extended legal fight.
According to people familiar with the talks, the two sides were discussing a deal whereby BofA would complete its purchase of LaSalle for $21bn, but would agree to sell some of LaSalle’s assets to RBS if the consortium’s €71bn ($95.5bn) offer for ABN Amro were to succeed.
In return, BofA would drop a lawsuit claiming billions of dollars in damages from ABN Amro.
The proposed structure is significant, because a successful deal with BofA would clear the way for the consortium to fight for control of ABN Amro with Barclays, the UK bank that has made a rival €63.5bn all-share bid.
The ABN Amro takeover was thrown into confusion last month when a Dutch court ruled the bank could not sell LaSalle to BofA without a shareholder vote.
The consortium has explored the possibility of buying LaSalle and then selling some of the assets to BofA. However, such a move would require ABN Amro’s approval. It would also undermine Barclays’ bid, which depends on ABN Amro completing the LaSalle sale.
Under the terms of the Barclays deal with ABN Amro, the British bank has to approve any significant changes to the LaSalle sale. If it was unhappy with the proposed changes, Barclays could withdraw its offer for ABN Amro and demand a €200m break-up fee.
“Everybody is trying to avoid tampering with the LaSalle contract,” one person close to the talks said.
BofA is keen to buy LaSalle because its Chicago operations fill the last significant gap in its national network. However, BofA is thought to be willing to sell some of LaSalle’s commercial banking operations and its branch network in Michigan. It could also sell the LaSalle brand, which it had planned to drop anyway.
The proposed deal between the consortium and BofA is complicated by potential tax liabilities that would arise from the deal. However, people close to the talks are confident these can be resolved.