Chase is on for Dresdner

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Chase, the US bank which is in talks to buy Flemings, has put in a £1bn offer for Dresdner Kleinwort Benson and is set to secure the corporate finance and securities trading operations of the merchant bank.

The deal could be announced this week, and will complement Chase's £3bn purchase of Flemings, another grand old British merchant bank.

DKB is being sold because the bank's 600-strong staff, led by Tim Shatlock, told the board of Deutsche Bank that they did not want to be integrated with its investment banking operations following the German group's merger with Dresdner Bank. DKB staff threatened a mass walk out if they were not given charge of the combined operations. One senior DKB executive described Deutsche - whose operations include the former Bankers Trust and NatWest Markets businesses - as "the greatest destroyer of value in investment banking since Nick Leeson".

Deutsche's chief executive, Rolf Breuer, has said that he might sell or close DKB, though many within the German bank envied the success of its corporate finance team. Part of DKB may be retained, though only in securities trading and fund management.

Chase is planning to use DKB to build its European operation and Flemings for its expertise in the Far East.

Insiders at DKB are convinced that Chase has won the battle for the bank though neither the US bank nor Deutsche would confirm the deal.

The possible sale of DKB has attracted a great deal of interest, with US banks DLJ and JP Morgan as well as French groups Société Générale and BNP/Paribas also contempating bids for the British merchant bank.