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Crédit Lyonnais in play?
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December 27, 1999: 6:57 a.m. ET
French bank’s shares continue to surge amid takeover speculation
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LONDON (CNNfn) - Crédit Lyonnais shares continued to advance strongly Monday as takeover speculation circled the privatized French bank.
The stock added almost 5 percent at one point Monday after soaring 15 percent Friday and 14 percent on Thursday on rumors of a bid from a French or German institution.
The French banking sector has been rattled over the past year by a series of takeover bids which have placed the country’s leading institutions at the heart of the consolidation of Europe’s banking industry.
With total net assets of 202 billion euros ($2.5 billion) at the end of June, Crédit Lyonnais is the third-largest listed French bank after Société Générale and Banque National de Paris (BNP), which fought their own bitter takeover battle earlier in the year.
Crédit Lyonnais has emerged as an attractive asset after flirting with bankruptcy in 1994. Rapid expansion in the late 1980s built up a huge portfolio of under-performing assets. France was forced by the European Union to privatize the bank to secure approval for a massive bailout and restructuring.
Crédit Lyonnais (PCL) shares have more than doubled since its privatization in July, which saw the government sell 33 percent to a group of seven banks and float 48.6 percent of its shares.
The stock reached a record 54 euros in morning trade Monday, before settling back to 52 euros, a gain of almost 4 percent.
SocGen is viewed as a potential takeover suitor after buying a 3.8 percent block of CL stock earlier this month, though the bank claimed it was merely interested in commercial alliances.
BNP is also viewed as a potential partner as it is well placed to take advantage of CL’s presence in retail and corporate banking. However, French mutual; bank Crédit Agricole, which received a 10 percent block of shares in July, is viewed as the best-placed bank to make a full bid.
While Crédit Lyonnais’ core shareholder group includes non-French banks such as Germany’s Commerzbank (FCMB), an overseas bid could lead to strong opposition from the French central bank which has resisted attempts to cede control of French banks to outsiders.
Dutch financial giant ING withdrew a $10.2 billion bid for Crédit Commercial de France in early December after the Banque de France appeared to block the deal.
BNP (PBNP) shares were flat Monday while SocGen (PCGE) stock gained 1.3 percent. None of the banks involved were available for comment. 
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