According to the Financial Times, Bank of America will file suit against Dutch lender ABN Amro if the group terminates the sale of its US subsidiary LaSalle to the US finance giant.
The Dutch bank, which is currently caught between competing bids from UK high street banking giant Barclays and a Royal Bank of Scotland (RBS)-led consortium, recently announced the agreed sale of its LaSalle business to Bank of America.
However, RBS has launched a conditional bid for ABN Amro, under the terms of which RBS will pay E72 million on the condition that LaSalle remained under the control of ABN Amro. If successful, the proposal from the consortium, which consists of RBS, Spain’s Santander and Belgium’s Fortis, would crush what appeared to be an agreed merger deal with Barclays.
ABN Amro has confirmed that it is to further discuss the proposal with the consortium. In light of this, the Dutch group now faces a potential lawsuit if the deal with Bank of America falls through.
However, under the terms of the sale, rivals may still put forward a higher bid to buy LaSalle until May 6, 2007, although, if Bank of America matches the higher bid, the sale will be in favor of the US banking giant, reported Reuters. Furthermore, ABN Amro has also reportedly stated that it has agreed to pay Bank of America a termination fee of $200 million if it accepted a higher cash bid from another player.
According to Reuters, Bank of America claims that it has a legal contract to acquire the US subsidiary and expects the contract to be completed.