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Abn War Descends Into Fiasco

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May 07 2007 12:00am EDT

ABN War Descends Into Fiasco

How silly is the war over ABN Amro getting? The $24.5 billion bid by the RBS consortium for LaSalle Bank is silly, because it's contingent "on the group not being exposed to any litigation related to the sale of LaSalle". But such litigation, from Bank of America, is a foregone conclusion.

But the rejection of the bid by ABN Amro is, if anything, even sillier. ABN says that it is rejecting the bid because it is contingent on the RBS consortium also buying the rest of ABN Amro. But the RBS bid has to include that contingency, or else the rival bid for Barclays simply rises in value because it includes whatever monies ABN gets from selling LaSalle. And there's no way that RBS is going to deliberately sweeten the Barclays bid.

The whole battle over ABN Amro has descended into fiasco at this point, and the only thing that's certain is that it will end up in years-long litigation. If ABN CEO Rijkman Groenink had only done from the beginning what was best for his shareholders, rather than trying every underhanded method in the books to ensure that his bank wasn't broken up, we wouldn't be where we are now. But as things stand, there's no really good outcome to this mess.

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