updated 4/25/2007 5:58:44 PM ET 2007-04-25T21:58:44

One of the largest takeovers in corporate history escalated into a bidding war Wednesday as a group led by Royal Bank of Scotland said it planned a bid worth almost $100 billion for ABN Amro that tops a Barclays’ offer by more than 10 percent.

Shareholders immediately pressured ABN to commit to accepting the highest bid, ahead of the Dutch bank’s annual shareholders’ meeting Thursday, and analysts said the key battleground is LaSalle Bank in the United States. One analyst called LaSalle the “crown jewel” of ABN’s international operations.

Royal Bank of Scotland PLC, Spain’s Banco Santander Central Hispano SA and Belgian-Dutch bank Fortis NV said they would offer around 39.00 euros ($52.95) per share for ABN Amro Holding NV — 70 percent in cash and 30 percent in RBS shares — valuing ABN Amro at roughly 72.2 billion euros ($98.1 billion).

That compares with Barclays PLC’s all-share offer of 36.25 euros announced Monday, which was endorsed by ABN’s management. ABN shares are up more than 35 percent since it entered talks with Barclays last month.

Shares rose 3.5 percent to close at 36.21 euros ($49.17) in Amsterdam on the news — above Barclays’ offer price at the British bank’s current stock price, but below the proposed rival bid by RBS. That means investors have serious doubts about who will win the fight to buy ABN, the Netherlands’ largest retail bank.

The uncertainty centers on whether ABN Amro’s surprise move Monday to sell LaSalle Bank Corp. to Bank of America Corp. for $21 billion, as part of its deal with Barclays, can be undone.

“The crown jewel is LaSalle, which both BofA and RBS want badly, but for different reasons,” said Bob Graves, co-chairman of the global banking practice at law firm Jones Day.

With its dominant position in Chicago and parts of the Midwest, Graves said LaSalle would “fill the one remaining hole in BofA’s national coverage.”

“For RBS, it’s more of a stepping stone” to give its U.S. operations critical mass, he said. RBS is the largest foreign bank in the U.S., via Citizens Financial Group, which is strongest in the U.S. Northeast.

“It doesn’t happen every day, when something like this comes on the market,” RBS Chief Executive Fred Goodwin said at his company’s annual shareholders meeting in Edinburgh Wednesday. “It’d be nice to own LaSalle, it’d be nice to own some of the other bits” of ABN.

Fortis wants ABN’s operations in the Netherlands, while Santander wants ABN’s fast-growing Brazilian and Italian operations.

ABN Amro has insisted it prefers Barclays’ offer as offering good value to shareholders while keeping the company’s core businesses intact. But ABN said it had agreed to meet with representatives of the RBS-led consortium about their bid Wednesday evening, ahead of the shareholders’ meeting.

Chief Executive Rijkman Groenink told Dutch television in an interview that “in fact, (the RBS consortium) want to deconstruct the bank, tear it apart, cut it up.”

“That brings great risks with it ... gigantic problems, and that’s why we’re against it,” he said.

Dutch labor union FNV said it opposed any deal with Fortis, which could lead to large job losses in the Netherlands as branch offices are combined in cities across the country.

But the RBS syndicate said in a statement that its members were “of the clear view that their proposals are superior for ABN Amro’s shareholders and are straightforward from a shareholder, regulatory and execution perspective.”

One ABN shareholder, hedge fund TCI, which holds nearly 3 percent of shares, said in a statement ABN’s management should accept the RBS-led deal.

“The Board of ABN Amro must recommend the RBS consortium offer, subject to the diligence condition being met, and terminate the LaSalle Bank sale,” TCI said.

Analysts said the RBS-led bid was both worth more and more secure, because of the large cash component. ABN’s agreement with Bank of America is widely seen as a “poison pill.”

“It was a clever construction intended to put RBS on the sidelines,” said Analyst Dirk Peeters of Belgium’s KBC Securities.

ABN Amro said Wednesday other banks have 14 days to submit superior bids for LaSalle. If any does, Bank of America then has five days to match that bid; if it fails to do so, it will receive a $200 million breakup fee from ABN Amro.

Bank of America said in a reaction Wednesday it “has a legal contract to acquire (LaSalle) and expects that contract to be fulfilled under its current terms.”

Graves of Jones Day said BofA was determined to buy LaSalle and could ultimately get more value out of it than RBS, but RBS would have less trouble integrating it, and it was impossible to say which would win a bidding war.

He said that Barclays could not raise its offer for ABN and would likely lose the bidding — and in the process become a takeover target itself.

Peeters of KBC said legal fights may erupt over ABN’s deal with BofA, but there were ways for the consortium to get around it. For instance, if RBS and its partners agree to outbid Bank of America to buy LaSalle, then launch a formal bid for ABN and unwind the LaSalle deal on their own terms later.

He said the $200 million breakup fee was “a lot of money, absolutely, but in a $100 billion deal it’s not that significant,” he said.

Peeters said he expected tension between ABN shareholders and management to erupt at Thursday’s meeting, even though shareholders won’t have a chance to vote yet on either deal.

“I don’t know if there will be yelling,” he said. But “70 percent cash (offered by RBS) is of course much better than 100 percent Barclays shares ... (because) it will take some time for Barclays and ABN to prove their deal will work.” ABN-Barclays shares could suffer in the meantime, even if their merger is ultimately successful, he said.

© 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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