As the banking world turns
TEXT OF INTERVIEW
SCOTT JAGOW: The world’s biggest bank takeover has so much drama, it might get its own reality show. Barclays has agreed to buy the Dutch bank ABN Amro. The Royal Bank of Scotland is swooping in with a better deal, but only if it can get ABN’s U.S. asset, La Salle bank of Chicago. Bank of America has agreed to buy La Salle. Well today, the Times of London says Bank of America has filed a $220 billion lawsuit to make sure it gets La Salle. Stephen Beard joins us from London. $220 billion, Stephen?
STEPHEN BEARD: The biggest bank takeover bid seems to have triggered the biggest lawsuit ever. And a little difficult to get our minds around this since the value of this purchase of La Salle by Bank of America is about $21 billion, so the value of the lawsuit apparently 10 times. But indeed Bank of America is warning that if anything happens to disturb their contract with ABN Amro, they will launch the mother and father of all lawsuits.
JAGOW: So what’s riding on this massive lawsuit?
BEARD: ABN Amro’s Chicago-based bank La Salle, this is the asset which the Royal Bank of Scotland, which heads the rival consortium bidding for ABN, wants to get hold of. In order to repel the Royal Bank of Scotland, ABN agreed to sell La Salle to Bank of America for $21 billion. And indeed ABN shareholders, the majority of ABN shareholders are upset about it too. So they’ve actually taken their case to a court in the Netherlands arguing that the sale of La Salle to Bank of America is illegal because it was done without shareholder approval.
JAGOW: So how is this all going to get sorted out?
BEARD: At long-last, perhaps by the end of this week, this long-running saga will reach some sort of conclusion. We’ll get a clearer idea who’s going to wind up with BAN Amro and who isn’t.
JAGOW: Alright Stephen very well explained, I’m glad this isn’t confusing for you.
BEARD: The only thing we can be certain about Scott, is that the lawyers are gonna make a mint.
JAGOW: Our European correspondent Stephen Beard.
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