The UK's third largest bank, Barclays, which is in exclusive takeover talks with financial services giant, ABN AMRO, is said to have moved closer to its buy out plans of its Dutch rival after agreeing to shift its headquarters to Amsterdam and share some top jobs with ABN AMRO.

Barclays had yesterday announced having opened exclusive talks with ABN for its acquisition. (See: Barclays opens buy out talks with ABN AMRO). The merger would be one of the biggest in the financial services sector and may prompt rival bids, analysts said.

If the takeover succeeds, it would create a bank worth as much as $155 billion (approximately Rs 691,600 crore), with 47 million customers and 220,000 staff worldwide.

Under the terms that are currently under negotiations, Barclays chief executive John Varley is expected to retain his job in the merged entity, while ABN's Rijkman Groenink could be the chairman.

However, the Barclays offer may not only invite rival bidders, but also make Barclays itself a takeover target, analysts have warned.

Other points being negotiated include a primary listing for the merged entity on the London Stock Exchange and a secondary one in Amsterdam. The financiers of the acquisition have also proposed using the Dutch Central Bank as the lead regulator and basing its management structures and governance on UK models.

This is somewhat similar to the structure being followed by the Anglo-Dutch oil giant Royal Dutch Shell.

In an assurance to its staff union, Barclays said that the shifting of the headquarters to Amsterdam "probably would not have any impact" on its staff in the UK.

According to analysts Barclays was making concessions to ABN to make the deal appear friendly and accepted quickly, leaving rivals like ING, BBVA and BNP Paribas, who have already said they would be interested in buying all or part of ABN, less time to outbid it.

Royal Bank of Scotland and Italy's Capitalia are among banking groups who may also be interested in buying some or all of ABN's businesses.

In recent years, ABN, the Netherlands' biggest bank, has cut jobs to control costs so it can expand into new markets and face down more competition. In recent months two UK hedge funds, TCI and Toscafund, have criticised the Dutch bank for its poor performance and are believed to be calling for a management shake-up at the group.