Rival Bidders Increase Cash Offer for ABN Amro

A consortium of banks led by the Royal Bank of Scotland has sweetened its bid for Dutch bank ABN Amro after a court last week approved a key part of a bid from rival Barclays.

The RBS group said Monday it will offer $98 billion for ABN, with more than 90 percent of that in cash. The group includes Spain's Santander Bank and Belgian/Dutch group Fortis. The consortium said its bid includes the $21 billion that Bank of America will pay for ABN Amro’s American subsidiary LaSalle Bank, with BofA taking over LaSalle, and the RBS group receiving ABN’s European operations.  The RBS group will receive $21 billion in cash from Bank of America in its new proposal.

The battle for ABN is thought to be the largest takeover ever. Barclays’ all-stock bid stands at $89.7 billion but analysts expect Barclays to increase that before a July 23 deadline. Last week, a Dutch court ruled that BofA could buy LaSalle without receiving ABN shareholder approval. Barclay’s bid was contingent on BofA’s bid for LaSalle, while the RBS group wanted to keep LaSalle as part of its original proposal.