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ABN at a Crossroads

Investors wonder what will come of a bidding war.

ABN Amro

(ABN)

is in choppy waters.

The Dutch bank has rejected a proposed $24.5 billion offer by a three-way consortium led by

Royal Bank of Scotland

for its Chicago-based banking operations, LaSalle Bank.

The consortium, which also includes

Banco Santander

(STD)

and Fortis, has offered $98 billion for all of ABN Amro, which it would then split up.

ABN Amro has already agreed to sell LaSalle to

Bank of America

(BAC) - Get Bank of America Corp Report

for $21 billion in cash, as part of an April deal to sell itself wholesale to

Barclays

(BCS) - Get Barclays PLC Sponsored ADR Report

for $91 billion.

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Despite the consortium's higher offer, ABN Amro is concerned about several of the conditions of that deal, including the fact that the group will only buy the Dutch behemoth if LaSalle is included.

The company said in a statement Monday that the acquisition proposal for LaSalle "did not constitute a superior proposal as a result of the uncertainty and execution risks."

It is concerned about a lack of transparency with respect to "financing, required regulatory notifications, tax clearances, the proposed material adverse change condition, required shareholder approvals and the pro-forma financial impact upon each of the consortium members," despite repeated requests for clarity.

"Further, no evidence as to the existence of any financing commitments was provided," the company says.

ABN Amro can fuss about the deal all it wants, but some observers say that in the end, money will talk.

Last week, a Dutch court froze ABN Amro's sale of LaSalle to BofA, saying it was required to put the deal to a shareholder vote.

"At the end of the day, Amro is going to be forced to do the right thing for its shareholders -- take the higher offer," says Anton Schutz, president of Mendon Capital Advisors and the fund manager to Burnham Financial Services fund, which owns positions in BofA.

But the Charlotte, N.C.-based lender intends to put up a fight. It has already filed a suit in federal court against ABN Amro in its fight for LaSalle.

The company said in a statement on Monday that since the "go shop period has expired, and we look forward to consummating our transaction on the terms set forth in our contract."

Wall Street is wondering, if BofA doesn't get LaSalle, will it go after another, ostensibly smaller, bank in the Chicago market?

On the one hand, it is set to make $200 million if the deal is terminated and ABN Amro accepts a higher offer for LaSalle.

But LaSalle has one of the largest market presences in the Chicago area, with 135 retail branches and $44 billion in deposits in the greater Chicago area.

"That's why there is a fierce bidding contest -- you can't get that market share," Schutz says.

ABN Amro is expected to put the decision to shareholders at a meeting in the near future so that they can "express their views on the alternatives available to them."

An ABN Amro spokesman was not immediately available for comment.

Shares of ABN Amro fell 85 cents to $49.05 on the

New York Stock Exchange

. BofA's stock rose 15 cents to $51.39.