A consortium led by Royal Bank of Scotland has thrown down a gauntlet: It has launched a rival bid for ABN Amro. The consortium--which also includes Spain's Banco Santander Central Hispano and Belgian-Dutch bank Fortis--has offered $98 billion in cash and stock. That's a decent premium over Barclay's all-share offer of $90 billion. That proposal is contingent on a sale of the bank's LaSalle Bank to Bank of America for $21 billion. That deal is not a sure-shot. Would-be buyers have 14 days to submit competing bids. There's a $200 million break-up fee involved. So this is really heating up. We've all been talking about a $100 billion deal, but most people assumed it would be in the U.S. and involve a financial sponsor. Still, all the top U.S. investment banks have a foot in the fire, including Merrill Lynch (Royal Bank of Scotland consortium), Lehman Brothers and Morgan Stanley (ABN Amro). Goldman Sachs provided a fairness opinion to the ABN Amro board. Citigroup is advising Barclays.

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- here's an AP article