ABN Shares Climb as Counterbid Speculation Heats Up

Shares in ABN AMRO climbed on Tuesday as speculation over a possible counterbid gathered pace, with Royal Bank of Scotland and Santander seen as likely rivals for the Dutch bank's current suitor, Barclays.

Barclays said last month it was in exclusive talks with ABN to strike the biggest-ever bank takeover and create a lender worth some $180 billion. The talks are expected to last until around April 18.

But newspaper reports over the Easter weekend, following market speculation last week, named RBS and Spain's Santander as likely rival bidders and said they were already preparing a joint offer ahead of next week's deadline.

Analysts have said RBS is one of the most likely banks to launch a rival bid, but it has declined to comment on its intentions and is not expected to move until Barclays shows its hand. Santander has also declined to comment.

"I think it's just more bid speculation as the market thinks that we are closer to Barclays disclosing the outcome of their talks with ABN," one trader said.

"And also recent press reports that suggest that there is no hurdle to an ABN AMRO break-up. In other words, the market thinks if there are few local regulatory issues, then a merger with Barclays or another suitor could take place."

Barclays has gone to great lengths to ensure its bid is friendly -- the merged entity outlined last month pointed to a bank headquartered in Amsterdam with its two top jobs split.

But the Financial Times reported on Monday that Dutch regulators would not object in principle to a rival bidder for ABN even if it meant the bank was to be broken up, as is expected to be the case under a possible RBS/Santander offer.

Shares in ABN were up about 2% at 33.87 euros. Shares in Barclays were up 0.5%, with RBS up 1.25% and Santander virtually flat on the day.

Talk of an RBS/Santander bid also revived speculation over the future of Italian bank Capitalia, in which ABN has an 8.6% stake, lifting it 2.6%.

The DJ Stoxx index of European banking stocks was up 0.4%.