WASHINGTON, Feb 7 (AFP) - Riggs National Bank said Monday it had filed suit against PNC Financial Services Group after PNC backed out of its deal to acquire the 165-year-old Washington bank for 779 million dollars.
Riggs said in a statement it rejected "terms and conditions" sought by PNC for the merger, saying this was effectively a "repudiation" of the merger agreement signed last July.
The Wall Street Journal reported that PNC was prepared to proceed with the merger but at a lower price, claiming the value of Riggs had declined as it settled probes into its complicity in money laundering.
Riggs said it was now entitled to "discuss merger combinations with other interested parties," but added that it was suing PNC for damages.
Riggs said that it had been "damaged by PNC's decision not to proceed with the merger after Riggs had devoted the last six months preparing for the merger and taking various actions at PNC's insistence."
The suit filed in Superior Court for the District of Columbia seeks "to hold PNC responsible for its wrongdoing and for the resulting damages it has caused, or, alternatively, to require PNC to uphold its end of the agreement and proceed with the merger in accordance with the agreement," Riggs said in a statement.
Riggs last month agreed to pay a 16 million dollar criminal fine to end a probe into allegations of money laundering for foreign officials, including former Chilean dictator Augusto Pinochet.
Riggs, which has been a fixture of the US capital and bank for many US presidents, was also fined 25 million dollars last year by US bank regulators for lacking an effective program to halt money laundering and for failing to report suspicious transactions.
02/07/2005 19:14 GMT - AFP