Dutch Court's Legal Advisor OKs ABN-BofA LaSalle Deal

ABN AMRO should not be forced to seek approval of the proposed sale of its U.S.-based LaSalle Bank subsidiary from its investors, according to a legal opinion Monday from a Dutch legal professor who advises the Dutch Supreme Court, Reuters reports. A Dutch judge in May froze a proposal by ABN to sell LaSalle to Bank of America, ruling shareholders first need to vote on the transaction.

The statement from legal professor and Advocate General Vino Timmerman, while not legally binding to the Supreme Court, is seen as a possible indicator on which way the court will rule in a case that would potentially pave the way for Bank of America to take control of LaSalle for $21 billion. Following that sale, plans call for British bank Barclays to buy the rest of ABN. The cumulative deal value would be over $90 billion. Timmerman said that ABN does not need to seek approval from shareholders on the LaSalle-Bank of America deal based on certain articles in the Dutch civil code.

A Dutch commercial court froze the sale of ABN’s LaSalle unit – a contingency acquisition component in the larger Barclays takeover of ABN – after a group of ABN shareholders filed suit claiming that they should have a say in the matter. ABN and others then appealed to the Supreme Court. Timmerman yesterday bluntly came down on the side of ABN, commenting in a statement, "The Advocate General advises the Supreme Court to quash the Commercial Court’s ruling.”

If the Supreme Court follows Timmerman’s advice, the already murky waters of the deal would become downright opaque. After Barclays announced its intention to buy ABN, under the contingency that Bank of America take over LaSalle, a second group led by the Royal Bank of Scotland entered the fray with a larger bid for ABN that specifically called for LaSalle to be included in the deal, blocking out Bank of America. RBS and its partners—Spain’s Banco Santander Central Hispano and Belgium-based Fortis—bid in the neighborhood of $99 billion, topping the Barclay’s deal. After ABN rejected that bid, shareholders sued.

But some news reports from last week indicated that Barclays is getting ready to sweeten its deal to match the RBS bid, which would alleviate any problems shareholders have with the bid.