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Right Royal mess

• Robert Peston
• 3 May 07, 05:18 PM

The battle to make the biggest ever takeover of a bank is suddenly wide open again, thanks to a decision in a Dutch court.

That matters in the UK, because the contest is between Barclays and a consortium led by Royal Bank of Scotland, both of which want to own ABN of the Netherlands.

Barclays looked to have the advantage, having agreed a deal with ABN's management.

It also helped Barclays' cause that ABN reached an agreement to sell its US business, Lasalle, to Bank of America. The reason the sale mattered is that Royal Bank of Scotland badly wants to own Lasalle.

Well today, a Dutch judge said ABN had no business selling Lasalle to Bank of America without getting permission from its own shareholders.

That's a huge blow to the credibility of ABN's management. And it’s a famous victory for Dutch shareholders, which will reverberate through the boardrooms of the Netherlands – where directors of companies haven’t always pursued the interests of their shareholders as zealously as they might.

It also puts Royal Bank firmly back in the game to buy ABN. Except for one lethal possible consequence.

Bank of America may now sue ABN for tens of billions of dollars for reneging on the deal. And that would make ABN rather less attractive to both RBS and Barclays.

As a banker said to me this afternoon, this battle is a long way from being over, and it's going to be bloody.

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