The board of Fokus Bank, Norway's fifth largest bank, recommended Den Danske Bank's 5.8 billion crown ($775 million) bid, or 80 crowns a share, to its shareholders over an identical bid by Handelsbanken after a dramatic bidding war on Thursday.

Fokus shares jumped 3.5 crowns to 76 in early trade on the Oslo bourse as the Nordic giants slugged it out. The shares were worth just 38 crowns a month ago before the bidding war erupted.

"We cannot rule out anything right now," Handelsbanken spokesman Gustaf Elmstedt told Reuters in Stockholm.

Fokus chose Den Danske Bank, Denmark's biggest bank, partly because it would let Fokus continue trading under its own name from its headquarters in Trondheim, mid-Norway, with its current strategy. Handelsbanken would integrate it more tightly.

Analysts said Den DanskeBank held the strongest cards but that it was far from certain whether the needed 90 per cent of shareholders would accept the bid or whether nationalist Norwegian politicians would approve the takeover.

And they were divided over Handelsbanken's next move.

"I believe Handelsbanken is prepared to make a higher bid but they may have to do something with their plan. They might suggest moving their Norwegian headquarters to Trondheim from Oslo," one analyst said.

Another said: "I don't think that Handelsbanken will risk a new bid, knowing that Fokus prefers the Danish offer. "I'd put Den Danske Bank's chances now at 70 per cent of success."

"This is good for Fokus shareholders," Fokus chairman Stein Holst Annexstad said of the Danish offer after a hastily-called board meeting North of Oslo to pick between the rival suitors.

Den Danske Bank fired the first salvo on Thursday with a surprise offer of 77 crowns a share, outbidding a 70-crown offer made last month by Handelsbanken, the Nordic region'sbiggest bank.

Handelsbanken hit back on Thursday evening by jacking its offer up to 80 crowns, a level then matched by Den Danske Bank.

Den Danske Bank, which bought 9.97 per cent of Fokus' shares on the Oslo bourse on Thursday, still faces many hurdles even if Handelsbanken gave up. It needs acceptances from 90 per cent of Fokus shareholders, who include rival Norwegian banks.

Danish newspaper Borsen said that Danish insurer Codan, which also has 9.97 per cent, might be willing to sell. Other shareholders with big stakes include Norway's Den norske Bank and a group of Norwegian savings bank.

Den Danske Bank also needs to persuade Norwegian authorities to accept the bid. Norway was ruled, first by Denmark and then Sweden, for centuries before winning full independence in 1905.

Fokus is an attractive target for bigger Nordic banks as a passport to business in Norway's fractured banking market.

Norway has until now sat on the sidelines of a wave of banking consolidation that has swept the rest ofthe Nordic region where banks have been teaming up to withstand mounting competition from Europe's big institutions.

Fokus has recovered from the brink of collapse in the early 1990s with the help of gigantic state bailouts. Pre-tax profit fell to 232 million crowns in the nine months to September 30 from 447 million in the same 1997 period.