ABN Rises on Rival Bid

Shares jump after a Royal Bank of Scotland group jumps into the fray.
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A consortium led by Royal Bank of Scotland threw its hat into the fray for

ABN Amro

(ABN)

.

Royal Bank of Scotland, along with

Banco Santander

(STD)

and Fortis, offered to buy the Dutch bank for $98 billion.

The second offer comes just two days after ABN Amro agreed to a $91 billion tie-up with Barclays. As part of that deal,

Bank of America

(BAC) - Get Report

would pick up LaSalle, ABN Amro's Chicago retail bank, for $21 billion.

The consortium has offered the Dutch bank $52.96 a share, payable in 70% cash and 30% stock. But the offer is "contingent on LaSalle Bank remaining within the ABN Amro group," it says.

"The banks believe that execution risk would be lower than in a transaction with Barclays," the consortium said in a press release. "The banks already have significant presence and experience in all of ABN Amro's main markets and also have proven capabilities in delivering transaction benefits from large-scale integrations and IT conversions, underpinning their ability to manage and integrate ABN Amro's operations."

Shares of ABN Amro rose 5% on Wednesday. The stock was trading on the

New York Stock Exchange

at $49.77, up $2.37.

Under the original deal, ABN Amro is allowed to entertain a higher offer for LaSalle for two weeks. While BofA is permitted to match a higher offer, the terms provide for a $200 million so-called termination fee payable to the Charlotte bank if ABN Amro accepts another offer.

ABN Amro provided further details on Wednesday on the terms of the LaSalle sale to BofA. The price of $21 billion is based on a tangible book value of $9.7 billion and net earnings of $899 million. Under terms of that deal, ABN Amro has provided a "go shop" clause, which gives BofA five business days to match a higher offer.

ABN Amro says it is "open to discussing" the Royal Bank of Scotland-led proposal and is meeting with the consortium in Amsterdam today.

BofA said in a statement Wednesday that it "has a legal contract to acquire ABN AMRO" and "expects that contract to be fulfilled under its current terms."