A Dutch court will rule on Thursday whether to uphold a shareholder petition to halt the sale by ABN Amro of LaSalle, its US lender, a move that would throw wide open the increasingly acrimonious battle for the Dutch lender.
Such a decision could leave ABN open to a damages claim from Bank of America, to which it has agreed to sell LaSalle for $21bn unless there is a higher offer by midnight Friday that BoA is unwilling to match.
Hans de Savornin Lohman, counsel for BoA, told the Dutch enterprise chamber, which met in special session on Saturday: “If the deal falls apart BofA would be compelled to file a substantial claim against ABN Amro in the court in New York.
“If the contract was not agreed that would be a default by ABN, and if that were the case ABN would owe damages with respect to Bank of America. If there was no transaction then the amount of [potential] damages cannot be over-stated,” he said.
Paul Olden, counsel for ABN, said: “If the deal is suspended Bank of America will walk away and in the worst case will claim damages under US law and before a US court.”
Referring to the impact on a bid for ABN by UK bank Barclays, he said: “With [legal] claims pending, the offer with Barclays will not go through.”
The titanic struggle for ABN drew lawyers from the six banks involved and those acting for VEB, the Dutch shareholder group that brought the case. Together with advisers, bankers and legal experts, they occupied every space on the court’s olive-green benches before a legal panel headed by Judge Huub Willems.
Represented were, on one side, ABN, Bank of America and Barclays, whose proposed €66bn merger with the Dutch lender was announced last Monday. On the other sat lawyers for VEB, and a consortium led by Royal Bank of Scotland and including Santander of Spain and Fortis, the Belgo-Dutch institution, which wants to buy ABN in its entirety and divide it between them.
The court, which specialises in business disputes, was asked by VEB to halt the LaSalle sale. The shareholder group claims the divestment is a poison pill to deter the RBS-led consortium from launching a bid to break up ABN. VEB wants the sale put to a shareholder vote, which ABN said was not legally required.
Jurjen Lemstra, counsel for VEB, claimed ABN was “frustrating or making it impossible for a competitive offer for the entire enterprise”. Referring to the LaSalle sale, he said: “The entire transaction is unlawful and must be reversed.”
Duco Oranje, counsel for Barclays: “There was no question whatsoever of this being an anti-takeover defence. The idea that such a cunning plan existed has not been proved at all.”
ABN maintained that it had been repeatedly rebuffed by the RBS consortium as it sought details of a proposal, which the trio has said would value ABN at more than than Barclays’ offer.
However, the consortium’s offer is conditional on it being allowed to bid for all of ABN, including LaSalle. ABN’s deal with Bank of America allows only bids for LaSalle – which must be in by midnight on Friday – or ABN excluding LaSalle.
Ruud Hermans, for the RBS consortium, said: “There is no level playing field and the most important reason is the agreement between ABN Amro and Bank of America, which impedes the consortium’s intention to make an offer on ABN Amro.”
Responding, Johan Kleyn, counsel for ABN Amro, said: “It was not the desire of ABN Amro to exclude the consortium from talks in any way.”
A graphic example of the bitterness that has crept into the battle was evident when Mr Kleyn referred to a telephone conversation between Rijkman Groenink, ABN chief executive, and Sir Fred Goodwin, his counterpart at RBS, late last Wednesday.
Mr Kleyn told the court Sir Fred had snapped “I am not here to be cross-examined”, then bluntly told Mr Groenink “it’s none of your concern” when questioned about the consortium’s plans.
Addressing the court, Mr Groenink said: “Banking is about people. It is a matter of trust and confidence. Awarding this claim will create a highly uncertain situation which will be detrimental to the bank and shareholders.”
Judge Willems said he would deliver his ruling at 4pm Central European Time on Thursday.