Bank of America, ABN deal halted

LONDON -- A Dutch court blocked ABN Amro Holding NV's $21 billion sale of LaSalle Bank to Bank of America Corp. because management failed to get shareholder approval for the deal.

"ABN Amro management has misjudged its task," said Judge Huub Willems of the Amsterdam district court's Enterprise Chamber in the ruling yesterday, backing a complaint by the Dutch investor group VEB.

The ruling may disrupt Barclays PLC's $90 billion takeover of ABN Amro and open the way for a group led by Royal Bank of Scotland Group PLC to make a higher bid for the Amsterdam company. The VEB shareholder group argued to the court that the sale of Chicago-based LaSalle to Bank of America was aimed at thwarting Royal Bank.

"It is much more likely that Royal Bank will win the day," said Colin Morton, a UK-based fund manager at Rensburg Sheppards who helps manage $1.8 billion and owns Barclays and Royal Bank stock. "If it had been legally sewn up, it would have been very difficult for the Royal Bank group," Morton said.

ABN Amro shares rose 1.9 percent in Amsterdam on optimism a higher bid will follow the ruling. Barclays shares jumped 3 percent. Royal Bank slipped 0.7 percent. Bank of America's stock rose 0.3 percent.

Barclays, the third-largest UK bank, "is continuing to pursue its recommended merger with ABN Amro which offers significant value to shareholders," the London-based company said after the ruling. An ABN Amro spokesman said the ruling is "clear" and the bank will respond at a later time.

Edinburgh-based Royal Bank, Santander Central Hispano SA, and Fortis, the group considering a joint bid for ABN Amro, said they would "await ABN Amro's response to the court decision."

A Bank of America spokesman said the company has a "binding contract" and intends to "take all necessary steps to protect our legal rights."