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ING nixes $10.2B CCF bid
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December 13, 1999: 7:09 a.m. ET
Dutch bank awaits French target's board meeting for next move
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LONDON (CNNfn) - Dutch financial giant ING refused to rule out a hostile bid for Credit Commercial de France Monday, despite earlier withdrawing a 10.08 billion euro ($10.2 billion) offer for the French bank.
ING's approach to CCF late Friday, which the Dutch company described as friendly, was put to CCF's board but not made public.
CCF's senior management made a statement Sunday in which it revealed an ING offer valuing it at 10.08 billion euros ($10.2 billion). The French company said it could not respond so fast to a proposal sprung upon it late Friday.
ING immediately responded by telling CCF chairman Charles de Croisset it was scrapping the offer of 137.5 euros per share. On the Paris bourse Monday, though, CCF shares gained 5 percent to 126 euros as investors regarded a new offer as possible. ING rose 0.4 percent to 57.2 euros.
"ING made it clear that its offer was a friendly offer in every respect and that it would not be made public until the approval of the CCF board had been obtained," the Dutch bank's statement said.
"ING Group concluded that at the meeting of the supervisory board of CCF on Dec. 12, the offer was neither discussed with respect to its content nor supported by the CCF board in a positive sense," it continued. Therefore, the offer "was withdrawn and no longer valid," the statement concluded.
Despite this apparent end to the matter, an ING spokesman Monday refused to concede that the deal was completely dead. Though admitting that a hostile approach would be an unusual step, the spokesman said:
"The market knows ING is a party that doesn't like hostile action," but added that the bank would keep its options open.
CCF's response
CCF said in a statement, "the plan, put forward in a sudden and unorchestrated fashion, has therefore not been the subject of any previous detailed discussion," it said.
CCF said it had been informed ING wanted it to back the friendly offer. But it said it would not deliberate on the issue until its next regular board meeting on Dec. 16.
CCF is a mid-sized French commercial bank, whose profits have risen 15 years consecutively.
ING's offer was at a premium of 15 percent over CCF's closing price of 119.8 euros Friday, a level that banking analysts described as fairly well priced and possibly enough to attract CCF's two other major shareholders, KBC Bancassurance of Belgium and insurer Swiss Life.
ING owns 19.2 percent of CCF's capital and 18.8 percent of its voting rights. Swiss Life has 14.6 percent of the capital and 19.4 percent of voting rights, while KBC has 18.2 percent of the capital and 15.4 percent in voting rights.
Both Swiss Life and KBC are reported to covet CCF, although KBC issued a statement Monday indicating it would not launch a bid of its own for CCF. "The others may well be interested," commented analyst Sheila Garrard at Lehman Brothers. She said the price offered is "fairly rich", and ING will be hoping for a more positive response when CCF's board next meets.
Garrard calculated the offer is around 3.2 times CCF's book value, whereas other French banks trade on a multiple of around two times.
Europe's wave of deals
The potential deal is merely the latest in a wave of consolidation engulfing the European banking sector. In addition to the sheer volume of banks choosing to merge in Europe, 1999 has witnessed a number of hostile approaches, something that was previously considered alien to many European players.
The most obvious example in continental Europe was the three-way battle between BNP (PBNP), Société Générale (PGLE) and Paribas in France. BNP eventually won control of Paribas, but was forced to hand back the shares it owned in SocGen. The French government, through the Bank of France, played a significant role in forging a "French solution" in the BNP deal, because it didn't want an overseas bank taking a large chunk of the retail banking sector. Analysts said CCF's smaller size means the state is unlikely to step in on this occasion, however.
In Britain, National Westminster (NWB) is currently the subject of two unwanted bids, from rivals Bank of Scotland (BSCT) and Royal Bank of Scotland (RBOS). 
-- from staff and wire reports
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