BNP Confirms Considering Bid for SocGen

PARIS — French bank BNP Paribas confirmed Thursday that it may bid for its scandal-hit local rival Societe Generale.

The news lifted SocGen shares. At 1138 GMT, they were up EUR2.46, or 2.6% at EUR83.96, recovering from losses earlier in the day. BNP shares were down EUR2.18, or 3.3%, at EUR64.65 in an overall lower market.

"We are only thinking about SocGen because all European banks are thinking about it," a BNP Paribas spokeswoman told Dow Jones Newswires. She declined to comment further.

Speculation about SocGen's future has mounted since the bank was shaken by a nearly EUR5 billion trading loss a week ago from an alleged fraud.

It isn't the first time BNP Paribas has had SocGen in its sights. In 1999, BNP launched an audacious hostile bit for both Paribas and SocGen, destroying an agreed merger between the two. Though it won Paribas, SocGen slipped through the net.

Since then, a merger between the two French banks has often been touted by analysts and bankers, though SocGen and BNP Paribas themselves have often denied any interest in joining forces.

On Wednesday, during a conference call with analysts, BNP Paribas' chief financial officer said he and his team hadn't had the time to focus on SocGen, as it was rushing out its preliminary results several weeks ahead of schedule.

A takeover of SocGen by BNP Paribas, possibly with the help country's third bank, Credit Agricole SA (4507.FR), as suggested by some analysts, could be preferred by France's political establishment, as it would create a national champion and prevent a foreign predator from buying one of the country's most venerable banking groups.

BNP Paribas also confirmed a newspaper a report that its chairman, Michel Pebereau, met with French presidential spokesman Francois Perol, but it said that meeting was planned long before the alleged SocGen fraud case was discovered and dealt with public policy matters.

"That meeting had nothing to do with SocGen," the BNP Paribas spokeswoman said Thursday.

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