RBS group offers more cash in $98 bln ABN bid

The takeover battle for ABN AMRO heated up on Monday with the Royal Bank of Scotland consortium boosting the cash element of its 71.1 billion-euro ($98 billion) offer.

The offer is above a rival all-stock bid from Britain's Barclays that is worth about 64 billion euros, which has been recommended by ABN's board.

The revised bid pushed ABN shares higher, with the price up 3.5 percent at 37.12 euros by 0726 GMT.

The consortium, which also includes Spain's Santander and Belgian-Dutch group Fortis, kept its offer for ABN at 38.4 euros per share, but raised the cash component of the offer to 93 percent from 79 percent before.

It said the remaining 5 billion euros of the offer will comprise new RBS shares.

The increase in cash on offer follows a Dutch court ruling on Friday which allowed ABN to move ahead with the sale of its U.S. bank LaSalle to Bank of America for $21 billion.

RBS had planned to buy LaSalle, but will now receive the cash from the sale of the business.

RBS shares were up 0.7 percent at 644.50 pence, Fortis shares were down 1 percent at 30.95 euros and Santander was up 0.07 percent at 14.17 euros.

RBS chief executive Fred Goodwin told reporters on a conference call that RBS had never considered pulling out of the consortium bidding for ABN, despite the exclusion of its main target asset at ABN, LaSalle.

The consortium members will pay the same amounts and receive the same ABN businesses as they had previously arranged, apart from LaSalle.

The banks said they had received assurance from ABN AMRO that their proposed offer will be dealt with on a level playing field with the Barclays offer.

Both have until July 23 to submit formal offers for ABN. The consortium's revised offer will still be subject to the same deadline, the Dutch market regulator AFM has indicated.

A hedge fund owning ABN shares told the bank's management in February to break up or sell the bank and ABN announced its deal with Barclays in April, at the same time as its sale of LaSalle.