Societe Generale, Paribas Fight Bid
LONDON (AP) _ French banks Societe Generale SA and Paribas SA pledged Tuesday to fight a hostile takeover attempt by Banque Nationale de Paris SA despite regulatory approval for BNP’s $37 billion bid.
The three-way merger envisioned by BNP would create a $1 trillion, world-leading banking group. It comes as European banks are joining forces to better compete in a market transformed by the region’s new common currency, the euro.
BNP’s proposed combination cleared its last regulatory hurdle Monday when the French stock market watchdog agency and the Bank of France both gave it their blessings.
Paribas and Societe Generale were completing a $17.2 billion friendly merger of their own when BNP stunned the European financial world on March 9 with an unsolicited takeover bid for both banks.
``We firmly believe that a three-way merger is impossible,″ Paribas spokeswoman Stephanie Carson-Parker said Tuesday.
Overlap between the retail banking networks of BNP and Societe Generale would necessitate branch closures and large-scale layoffs, while BNP’s plans to continue its investment banking business suggests that it hasn’t decided how to incorporate similar operations at Paribas, Carson-Parker said.
She refused to say what specific steps Paribas might take to fend off BNP.
A commission that monitors the French stock market ruled Monday that BNP’s takeover plan contained all the necessary information for the tender offer to move forward. The ruling came soon after a regulatory subcommittee of the Bank of France said BNP has the right to take over at least 50.01 percent of the other two French banks.
Under the terms of the regulatory approvals, Paribas and Societe Generale must hold board meetings by next Wednesday to consider BNP’s offer.
Societe Generale spokesman Michel Thibout said his bank would not deviate from its original plan to merge with Paribas. He refused to say what defensive measures Societe Generale was considering.
A BNP spokesman refused to comment Tuesday when asked about the continued objections of Paribas and Societe Generale. However, the bank released details of plans to proceed with efforts for a two-way merger with either bank if the three-way merger plans fail.
Share prices for all the three banks closed higher in trading Tuesday.