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BNP bids face late hurdles
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July 29, 1999: 4:14 a.m. ET
SocGen puts up greater barriers to hostile three-way takeover
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LONDON (CNNfn) - France's unprecedented three-way banking battle took another twist Thursday, as it approached the final straight.
Paribas chief executive André Levy-Lang told CNN that BNP's hostile takeover offers for Paribas and Société Générale were doomed to failure.
"There's been no example of a successful hostile merger in banking that I know of. It will not happen because they will not get the shareholder vote."
The takeover offers, and the planned friendly merger between SocGen and Paribas, are due to close on August 6.
His comments came as Paribas and SocGen appeared to be garnering support from core shareholders. Late Wednesday Spanish banking giant BSCH announced that it had raised its holding in SocGen to 3.34 percent from 2.85 percent. BSCH is seen as an ally of SocGen's management, although a BSCH spokesman told Reuters the increased investment "had nothing to do" with the current bidding war.
BSCH's investment came as one of Britain's top insurers, CGU (CGU), said it would consider raising its stake in SocGen to 10 percent from the current 3.1 percent level.
CGU has been represented on SocGen's board for more than 10 years.
With shareholders apparently lining up in support, SocGen launched last-ditch legal attempts to thwart BNP's offers, according to a newspaper report.
London's Financial Times reported Thursday that SocGen has petitioned the U.S. Federal Reserve, claiming that BNP should be charged with criminal offenses if it accepts any Paribas shares tendered.
SocGen reportedly contends that BNP missed a U.S. regulatory filing. If supported by the Fed governors this could mean a lengthy delay to BNP's offer, possibly breaking the August 6 deadline imposed by the French regulatory authorities.
In a separate development, Paribas and SocGen reported sparkling half-year earnings increases Wednesday. BNP is due to announce its own figures for the first six months after the close of the market Thursday.
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