Banks Abuzz on ABN Deal

Wall Street doesn't expect Barclays (BCS Quote) to win ABN Amro(ABN Quote) without a fight.

The European banks moved closer Tuesday to a huge merger. But analysts say other bidders could well emerge -- for U.K. bank Barclays as well as its Dutch target.

The companies confirmed on Monday that they were in "exclusive preliminary discussions" for a merger. The Wall Street Journal reported that an acquisition could cost Barclays some $80 billion.

After surging 14% on Monday's news, ABN Amro fell 56 cents, or 1.4%, to $40.80 on Tuesday. Barclays was up $1.52, or 2.9%, to $54.87.

ABN Amro, which has operations in 53 countries, including a sizable U.S. retail presence, has been under pressure to boost its shares through the sale of some units or to find a merger partner. Recently the Children's Investment Fund, a hedge fund that has a 1% stake in ABN Amro, called on the $1.3 trillion-asset bank for action.

Barclays operates in more than 50 countries through six major businesses, including retail banking in the U.K. and internationally. It has a credit card business called Barclaycard and investment banking, investment management and private client operations. At the end of 2006, it had $1.8 trillion in assets under management.

In the U.S., while Barclays has boosted its wealth management and asset management through new hires and new products, it has not pushed into retail banking. The purchase of ABN Amro would give the U.K. bank a solid presence in the Midwest through ABN Amro's LaSalle Bank.