Published: May 3, 2007
CHARLOTTE, North Carolina: Eager to fill one of the few holes in its coast-to-coast business, Bank of America Corp. hinted Thursday it is not likely to back down without a fight after a Dutch court blocked its purchase of LaSalle Bank Corp.
"We have a binding contract and intend to take all necessary steps to protect our legal rights," said spokesman Scott Silvestri, a few hours after a court in the Netherlands ruled ABN Amro, that country's largest bank, must receive the approval of shareholders before completing the $21 billion (€15.43 billion) cash deal.
But such determination might not matter. The bank's deal for LaSalle is one piece of a much larger transaction, in which Britain's Barclays PLC would buy the rest of ABN Amro's assets for $91 billion (€66.85 billion). Thursday's ruling appears to increase the chances a rival $98.5 billion (€72.36 billion) offer for ABN from a three-bank consortium, led by Royal Bank of Scotland PLC, will win out.
"The Dutch court's decision seems to keep the sale of LaSalle linked to the bidding process for ABN Amro," wrote CreditSights analyst David Hendler in a research note. "As a result, we think the decision tips the 'jump ball' for ABN in favor of the Royal Bank of Scotland consortium."
Silvestri said the bank would not have any further comment beyond his statement. Investors in Bank of America appeared indifferent to the news, pushing Bank of America shares up 22 cents to $51.23 (€37.63) on Thursday.
LaSalle, which has $113 billion (€83.01 billion) in total assets and is one of the top 20 banks in the U.S., has long been coveted by Bank of America chairman and chief executive Ken Lewis for its large share of customers in the Chicago area, the nation's third largest financial services market.
In the last four years, Bank of America has increased its retail presence in Chicago from a single financial center to 56 locations. But when combined with LaSalle's 141 Chicago area offices, Bank of America would have more than 14 percent of the deposit market share in Chicago and move past JPMorgan Chase & Co. to become the largest bank in the area.
"There isn't another American bank that is positioned to get as much value out of LaSalle as Bank of America," said Tony Plath, an associate professor of finance at the University of North Carolina at Charlotte.
The deal would also expand Bank of America's presence in Michigan, where the bank had only 25 ATMs and not a single branch office at the end of 2006, further extending the reach of the nation's second largest bank by assets into the upper Midwest — one of the few areas in the U.S. where the company isn't entrenched.
Under the original deal, ABN Amro is allowed to entertain a higher offer for LaSalle until Sunday. ABN Amro has also provided a "go shop" clause, which gives Bank of America five business days to match a higher offer. Should ABN accept another offer, Bank of America gets a $200 million (€146.92 million) breakup fee.
Bank of America could potentially raise its bid for LaSalle, and other bids could surface for all or parts of ABN Amro. But, Hendler said in his research note, "our sense is that BofA will wait for the next move by RBS & Co. before deciding its next steps."
Either way, Plath said it would be foolish to think Bank of America — a company built on a series of blockbuster mergers and acquisitions — wouldn't continue its efforts to expand. Lewis has expressed an interest in Chicago for months, taking care to note the strength of LaSalle in speeches and conference presentations.
"Even if they lose LaSalle, they are not going to lick their wounds and go back to Charlotte," Plath said. "They are already in Chicago and they will find other means to grow there. You can build a hell of a lot of branches with $21 billion (€15.43 billion)."
Bank of America Corp.: http://www.bankofamerica.com
Source : http://www.iht.com/articles/ap/2007/05/03/business/NA-FIN-US-Bank-of-America-LaSalle.php
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