The head office of ABN Amro bank is seen in Amsterdam March 20. A consortium led by Royal bank of Scotland has ltopped Barclays' bid for Dutch rival ABN Amro. - Reuters

A consortium led by Royal Bank of Scotland (RBS) has launched a €71.1 billion (US$95.9 billion) bid for Dutch group ABN Amro, trumping Britain's Barclays in a battle for the world's biggest bank takeover.

In a long-awaited move, RBS and its partners Fortis and Santander said yesterday they had raised the cash element of their offer from an original proposal but the bid was conditional on being able to unpick ABN's sale of its United States arm, LaSalle Bank.

The offer was pitched at €38.40 per ABN share - €30.40 in cash plus 0.844 new shares in RBS. The Barclays offer of 3.225 of its shares for every ABN share was worth around €64.4 billion yesterday, or just under €35 a share.

"This (RBS) deal offers better value for ABN shareholders and we anticipate the consortium winning control," said Alex Potter, an analyst at Collins Stewart in London.

But ABN's shares dipped 0.8 per cent to €35.81, as the RBS offer was similar to that indicated a month ago and as the consortium failed to resolve the dispute over LaSalle Bank. The consortium said it would prefer to agree a takeover with ABN's management but indicated it would go directly to shareholders if necessary.

Level playing field

It said it expected its offer to be put alongside the Barclays offer in any takeover vote put to ABN's investors.

"All of the bids should go before shareholders and they should allow shareholders to decide in an environment of having as level a playing field as can be," said Fred Goodwin, RBS's chief executive. ABN's shareholders had signalled support for the consortium's proposal at a vote last month, he said.

The RBS consortium said its offer would be pulled if it is unable to buy LaSalle, which ABN agreed in March to sell to Bank of America for US$21 billion at the same time as it agreed to be taken over by Barclays. A Dutch commercial court has blocked the LaSalle sale, however, saying ABN shareholders should vote on it. A Dutch Supreme Court is likely to rule on the deal by mid-July.

Goodwin said the banks had held "amicable and professional" discussions with Bank of America regarding LaSalle but they failed to reach an agreement.

"There was a gap between the parties that didn't get bridged," Goodwin said.

He declined to comment on speculation RBS may consider splitting LaSalle with Bank of America to reach a compromise, but said talks could restart. "We're in the market to solve them (outstanding issues) if they can be solved," he said.

A cash payment of up to €1.9 billion - or one euro of the offer price - would be deferred from the offer to pay for any costs related to settling the LaSalle dispute. Lawyers had indicated any costs relating to the issue should not exceed that, Goodwin said. The consortium said it could achieve annual cost savings of €4.2 billion and profit enhancements from revenue benefits of €1.2 billion from the deal by the end of 2010.

-Reuters