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Alcatel Rebuffs BNP in France

July 20, 1999

PARIS (AP) _ Alcatel won’t tender its stake in Societe Generale to Banque Nationale de Paris, which is in a prolonged battle to take over the banks Societe General and Paribas.

Alcatel Chairman Serge Tchuruk said today the telecommunications group favors the merger planned by Societe Generale and Paribas.

``Alcatel believes that the best project is the SG-Paribas merger,″ Tchuruk said at a news conference.

The SG-Paribas project has ``greater industrial feasibility,″ Tchuruk said. He added that he was skeptical that a three-way merger ``where the parties seem to be in a conflict situation″ could succeed.

Tchuruk is a board member of Paribas and as of December 1998, Alcatel held a 2 percent to 3 percent stake in Societe Generale.

Alcatel’s backing of the SG-Paribas deal comes on the heels of Monday’s announcement by French drinks group Pernod Ricard that it will not tender the shares it owns in Societe Generale to BNP.

BNP has been waging a five-month takeover fight for Societe Generale and Paribas even though Societe Generale prefers its own deal to take over Paribas in a friendly merger.

The takeover fight began in March when BNP offered $37 billion for the two banks after they had already agreed on a deal. Societe Generale and Paribas rejected BNP’s offer and have spurned its advances since then.

On July 1, the BNP increased its initial bid by five percent.

A merger of the three banks would create the world’s first $1 trillion bank in terms of assets.

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