WOL lotta trouble ABN Amro’s in
ABN Amro Holding NV (Euronext, NYSE: ABN) got served a double defeat in Amsterdam courts Thursday, in cases regarding its role in the initial public offering of World On Line International NV (World Online, also commonly referred to as WOL) and regarding the sale of its US subsidiary ABN AMRO Bank North America Holding Company (LaSalle Bank) to Bank of America (NYSE: BAC). In both cases, the Vereniging van Effectenbezitters (Dutch Investors’ Association, VEB) had filed the petition with the court. (opinions: WOL, LaSalle, both in Dutch)
Unsurprisingly, the next day’s headlines focused on the latter action in light of ABN Amro being on the target end of ‘the world’s largest banking deal’. (For more on the ABN Amro takeover battle, see for example the FT.com ABN Amro In depth section.) The VEB had sued ABN Amro to halt the sale of LaSalle, arguing that the transaction effectively served as a poison pill. The court agreed that the bank, considering the sale was linked to the takeover approach from Barclays Plc (LSE: BARC; NYSE: BCS), should have sought shareholder approval for the sale. Now ABN Amro may still seek that shareholder approval or appeal against the ruling by June 14.
That noted, the M&A developments themselves do take place largely if not exclusively outside the scope of WV&Z, at least for now.
The action against ABN Amro and its co-defendants Goldman Sachs (NYSE: GS) and World Online on the other hand is well within the scope here. ABN Amro and Goldman Sachs, as well as World Online itself, have been found guilty of misleading investors in the events, including by way of the prospectus, leading up to the initial public offering of World Online shares and during a certain period of share trading thereafter. (WOL was subsequently taken over by Tiscali SpA (Borsa Italiana: TIS).)
The Shell settlement - approval of which is pending before an Amsterdam court - was relatively big, an upcoming WOL settlement, based on the claim to follow this verdict, could be even bigger: VEB says that 150,000 investors (of which nearly 11,000 are VEB members) have lost €3 billion and it has indicated that the claim could run into the ‘hundreds of millions of euro’. (A partial defeat suffered by VEB in this case is that it has to revise how to administer the claim from the procedure presented to the court.)
A settlement however is no certainty, as the parties may appeal the decision. Watch this space. (Days left: 79)
What’s more: the day after the Enterprise Chamber’s ruling that the sale of LaSalle required shareholder approval, Bank of America filed a breach of contract action against ABN Amro (SDNY, Case number 1:07-cv-03578-PKC); see the complaint.