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Stalled ABN Deal Weighs on Barclays

CNBC.com
Thursday, 24 May 2007 | 4:42 AM ET

Shares of Barclays fell Thursday, as uncertainty about the outcome of its deal to acquire Dutch rival ABN Amro overshadowed an upbeat trading statement.

The British bank said it had "a strong start to the year" and confirmed previously released first-quarter results that saw pre-tax profit rise 15% from the same period last year.

But the stock slid 0.9% in morning trading.

The ABN deal is “very, very messy indeed," Chris Wheeler, senior managing director in equity research at Bear Stearns, told "Squawk Box Europe," Noting that a consortium led by the Royal Bank of Scotland still has the best chance of landing the Dutch bank.

Complications surrounding ABN Amro’s proposed sale of its U.S. retail banking arm LaSalle could see the deal drag on until the autumn, potentially damaging ABN Amro’s business, according to Wheeler.

“Unfortunately, particularly for ABN Amro, this is dragging on a very long time,” he said.

ABN agreed to sell LaSalle to Bank of America, but any higher bid from the consortium would likely be conditional on LaSalle being part of the deal.

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