Bank group to launch bidding war for ABN

Bidding for one of the largest takeovers in corporate history escalated Wednesday as a group led by Royal Bank of Scotland said it planned a bid worth almost $100 billion for ABN Amro that tops Barclays’ offer by more than 10%.

Shareholders immediately pressured ABN to commit to accepting the highest bid, ahead of the Dutch bank’s annual shareholders’ meeting today, and analysts said the key battleground was LaSalle Bank Corp. in the U.S. One analyst called LaSalle the “crown jewel” of ABN’s international operations.

Royal Bank of Scotland, Spain’s Banco Santander Central Hispano and Belgian-Dutch bank Fortis said they would offer about $53 a share for ABN Amro Holding -- 70% in cash and 30% in RBS shares -- valuing ABN Amro at $98.5 billion.

That compares with Barclays’ all-stock offer announced Monday, which was endorsed by ABN’s management. Barclays’ bid was worth $88.1 billion based on the close of trading Wednesday. ABN shares are up more than 35% since the bank entered talks with London-based Barclays last month.

The uncertainty centers on whether ABN’s surprise move Monday to sell LaSalle Bank to Bank of America Corp. for $21 billion, as part of its deal with Barclays, can be undone.

“The crown jewel is LaSalle, which both BofA and RBS want badly but for different reasons,” said Bob Graves, co-chairman of the global banking practice at law firm Jones Day.

With LaSalle’s dominant position in Chicago and parts of the Midwest, Graves said, it would “fill the one remaining hole in BofA’s national coverage.”

“For RBS, it’s more of a stepping stone” to give its U.S. operations critical mass, he said. RBS is the largest foreign bank in the U.S., via Citizens Financial Group, which is strongest in the U.S. Northeast.

“It doesn’t happen every day, when something like this comes on the market,” RBS Chief Executive Fred Goodwin said Wednesday at his company’s annual shareholder meeting in Edinburgh, Scotland.

Fortis wants ABN’s operations in the Netherlands, and Banco Santander wants ABN’s fast-growing Brazilian and Italian operations.