Dutch bank ABN Amro, the target of takeover bids from Barclays and Royal Bank of Scotland (RBS), has announced it will not recommend either of the two bids.
A successful takeover bid will create one of the world's largest banks and both bidders have been outdoing each other to woo the management of ABN.
In a statement with its second-quarter results, ABN Amro said it was "not currently in a position to recommend either offer for acceptance to ABN Amro shareholders.
"ABN Amro will further engage with both parties with the aim of continuing to ensure a level playing field and minimising any of the uncertainties currently associated with the offers with a view to optimising the attractive alternatives available to ABN Amro's shareholders."
Barclays recently obtained the support of China Development Bank and Singapore investment firm Temasek in a new attempt at securing the takeover. Barclays offered an $89.55 billion (£44.16 billion) bid consisting of 37 per cent in cash and the remainder in shares.
RBS is leading a consortium of banks including Santander of Spain and Fortis. Its 71 billion (£47.84 billion) bid consisted of 93 per cent in cash and the rest in shares.
Responding to the news, Barclays chief executive John Varley said: "We recognise that, at the current time, it is difficult for the boards of ABN Amro to make a clear recommendation to their shareholders.
"However, we are pleased to have their continuing support and we are confident that our revised offer delivers the value, stakeholder benefits and certainty that will allow the boards to support a recommendation in due course."
RBS is yet to comment on ABN's statement.
ABN Amro's net operating profits fell as the increase in operating expenses of 14 per cent soured the increase in operating incomes of 12.6 per cent.
Its net operating profit fell by 0.8 per cent from 1.67 billion (£1.1 million) to 1.6 billion (£1.12 billion).
ABN Amro chairman Rijkman Groenink said: "We are well on track to deliver an EPS of at least 2.30 [£1.55] on an adjusted basis as the change in the organisational structure implemented in 2006 created the conditions for improvement in our performance.
"Further execution of the initiatives set for 2007 (growth, efficiency, and acceleration of action plans) led to a strong second quarter, which was otherwise marked by conditions of uncertainty for ABN Amro."