Shares in Dutch bank ABN Amro and Barclays rose this morning after they confirmed they were in talks that could see Britain's third-biggest bank pay more than $80 billion for its rival.
Barclays and ABN said late yesterday they were in "exclusive preliminary discussions". No details of the structure of any deal were released, but at current values a combination would create a $166 billion financial services group.
By 8.30am ABN shares were up 4.1 per cent at €31.18, after hitting an all-time high of €31.33, to value it at more than €59 billion ($78.5 billion).
Barclays shares were up 2.3 per cent at 692 pence, valuing it at more than £45 billion ($87.5 billion).
Analysts said a deal would make strong strategic sense but that there was limited scope for Barclays to pay a significant premium for ABN as cost savings from a deal would be limited.