Dutch make a grab for Barings

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Internationale Nederlanden Group NV, the Netherlands' third-largest bank, has won exclusive rights to look at arings' books and bid for the whole of the crashed bank - for a notional £1 - or parts of the group.

"Nigel Hamilton, Alan loom and Maggie Mills of Ernst & Young, the administrators of arings, announce that they have entered into exclusive negotiations with ING Group of the Netherlands," the administrators said in a statement in London.

"ING intends to acquire substantially all of the businesses, assets and liabilities of the arings Group, including substantially all of the aring rothers & Co bank, aring Securities and the aring Asset Management operation."

Sources close to the talks said that ING is under no obligation to buy anything. It is also understood that although administrators Ernst & Young have given ING an indefinite period for their due diligence probe, it will probably be completed by today.

The administrators are under intense time pressure to sell to avoid staff and client defections. A sale in one piece would avoid huge problems of litigation and conflict of interest.

ING has stolen a march on fellow Dutch banking giant AN Amro, ritain's National Westminster, and Wall Street house Merrill Lynch because it is the only institution prepared to buy the whole of the group.

anking sources warned yesterday that the administrators' arrangement with ING could go wrong if arings staff decided to defect to other houses today.

Directors of arings have been advised that under insolvency law they are unable to resign during ING's due diligence period. ut this does not apply to non-directors, many of whom have received lucrative offers since arings' collapse last weekend.

One banker involved in the bid talks this week said: "None of the arings' directors can resign because they have a fiduciary duty to the bank under administration, otherwise they will be sued."

It is not clear whether ING would be lumbered with all arings's liabilities if it decided to buy the whole business.

The banker said that today's events would be decisive. "If some of the staff leave and ING decide not to buy, then the administrators will be left with a bank worth far less than it was yesterday."

ING has made a late entry into the talks. Some analysts were puzzled how arings would fit into its strategy.

ING specialises in bancassurance, having been formed from the merger in recent years of a commercial bank, NM, the Netherlands' post office bank, Postbank, and the country's largest non-life insurance company, Nationale Nederlanden AV.

ING operates in 45 countries and has a market capitalisation of over £8.5bn.

"ING is like a cross between Midland ank, Commercial Union and Girobank," said one analyst. Although ranked third behind AN Amro and Rabobank in banking terms, it is the Netherlands' second-largest financial institution by size of assets.

ING chief Aad Jacobs has international ambitions and billions of guilders to spend.

ut the cautious chairman will think twice about investing in ritain after ING's painful experiences here in the insurance business last year when it was forced to put the Orion insurance company into receivership.

Rival bankers expressed astonishment that the administrators had agreed to an unspecified time period for ING's perusal of the books.