ABN Amro announced Monday that it is preparing to sell Brazilian Banco Real in a move that would make ot possible for ABN Amro and Barclays to compete with the offer made by banking consortium Fortis, Royal Bank of Scotland and Santander, according to news reports.

Earlier this year, ABN Amro also sold its US subdivision LaSalle. RBS and its partners have said they want to trump the Barclays offer, but only if they can undo the deal to sell LaSalle. Some ABN shareholders have also contested the sale of LaSalle without their consent. Both ABN and Bank of America have appealed against the court decision to freeze the LaSalle sale.

The Dutch financial daily newspaper Financieele Dagblad cited an anonymous source who confirmed the two merger partners were conducting preparatory talks about the sale.

However, the sale would only go through if the consortium decided to place another bid on ABN Amro.

If it failed to do so, "ABN Amro and Barclays will not do anything either," the anonymous source was quoted. The banking consortium has until May 27 to place another bid on the Dutch holding.

Barclays would prefer to keep the Brazilian bank. However, the British bank has to avoid becoming a target for possible takeovers itself. In this context, winning the battle for ABN Amro is more important for Barclays than retaining the Brazilian market.

If ABN Amro sells Banco Real to the highest bidder, it can give shareholders extra cash after the merger with Barclays.

Brazilian bank Banco Itau and Spanish banks BBVA and Santander already expressed their interest in Banco Real.