LONDON (AFP) - A European banking consortium, led by the Royal Bank of Scotland, is expected to reveal on Tuesday if it will launch a takeover bid for Dutch giant ABN Amro, in the world's biggest ever bank takeover battle.
If the grouping, which also includes Spain's Banco Santander and Belgian-Dutch Fortis, goes ahead with its hostile bid, it would be competing with a 67-billion-euro friendly bid from British bank Barclays which has been favoured by the ABN Amro management.
" ... Fortis, RBS and Santander intend to make an announcement on Tuesday 29 May ... clarifying whether or not, and if so under what circumstances, the banks will make an offer for ABN Amro," the consortium said in a brief statement on Friday.
Whichever of the two suitors wins the day, the transaction would be the world's biggest ever bank takeover in financial terms, beating the previous record for a banking merger when US group Travelers bought Citigroup for 72.56 million dollars in 1998.
The battle shows how European banks are chasing rapid expansion in Europe, the United States, Asia and emerging markets.
ABN Amro has expanded into emerging markets in Asia and has interests in Canada, Italy, Mexico and the United States. It has 4,500 branches in 53 countries.
A takeover of ABN Amro would create Europe's second-biggest bank, or the fifth biggest in the world.
But the fate of the Dutch giant would differ according to whoever wins the day. While Barclays intends to keep the bank largely intact, with the notable exception of US Bank LaSalle, RBS is believed to want to take the bank apart.
RBS proposed an informal bid last month worth 72.1 billion euros. That eclipsed the agreed takeover from Barclays by some five billion euros.
Many shareholders have preferred the informal offer of the consortium which is higher and partly in cash, whereas the Barclay's offer is a share swap.
The Dutch bank has been underperforming for the last few years, failing to meet its own targets and seen as vulnerable to a takeover.
At the centre of the takeover battle is also the fate of ABN Amro's American subsidiary LaSalle, which the bank has agreed to sell to Bank of America for 21 billion dollars under the deal with Barclays, before the takeover is completed.
That sale has been seen as a so-called "poison pill" aimed at making ABN Amro less attractive to the hostile Bank of Scotland-led consortium, which wants to keep LaSalle in the group.
The Dutch supreme court has frozen the sale of the subsidiary until the shareholders can vote on the matter, a decision ABN Amro has formally appealed. At the same time the Bank of America has taken legal action against ABN Amro for breach of contract, with billions of dollars of damages at stake.
The British press reported at the weekend that RBS was in negotiations with the Bank of America on the sale of LaSalle.
"In the past week, RBS executives have been negotiating with their counterparts at BofA (Bank of America) in an attempt to resolve their dispute about the ownership of LaSalle," the Financial Times reported.
"One option is for BofA to sell part of LaSalle to RBS in return for the consortium dropping its interest in the division. At the same time, BofA would withdraw a lawsuit against ABN Amro that threatens to destabilise the consortium's offer," it said.