PARIS, March 19: French banking giant BNP Paribas said on Wednesday it had dropped any idea of a bid for Societe Generale, another leading French bank rocked earlier this year by the biggest-ever rogue trading scandal.
Analysts said Societe Generale was now highly unlikely to attract alternative bidders, domestic or foreign, at least until the crisis on financial markets subsides and the troubled French bank has published first quarter results.
“Given persistent rumours of a bid, BNP Paribas wants to make clear that it is no longer looking at proposals for a tie-up with Societe Generale,” BNP Paribas said in a statement.
“The conditions allowing a value-creating operation for shareholders are not in place,” it added.
BNP Paribas had revealed at the end of January that it was looking at Societe Generale after its rival announced trading losses of 4.9 billion euros arising from allegedly unauthorised trading for which one of its traders, Jerome Kerviel, is being investigated.
There was speculation at the time that the French government would favour a takeover by BNP Paribas to head off any foreign bid.
“BNP are right to give up on this,” one Paris-based dealer commented, asking not to be named.
“They must have realised it was killing their share price and that, given the major overlaps in the two groups’ businesses and the current economic environment, there’s no point taking the risk,” he commented.—AFP
