France's Stock Market Regulator to Rule on Titantic Bid Battle

Strategic Insights -

The French stock market regulator, the CMF, is set to decide on the final timetable for a titanic bid battle involving three of the country's largest banks: Societe Generale, Paribas, and Banque Nationale de Paris. The regulator is expected to announce the closing date for the bids, with 21 July being the likely date. The battle has seen Societe Generale offering 21bn euros for Paribas and Banque Nationale de Paris making a hostile 40bn euro bid for the other two banks.

Key Takeaways:

  • The CMF is expected to announce the closing date for the bids on 21 July, with Societe Generale's 21bn euro offer and Banque Nationale de Paris's 40bn euro bid still in play.
  • Banque Nationale de Paris raised its offers for both Paribas and Societe Generale, improving the offer to Paribas shareholders by 12.4 per cent and adding cash to the Societe Generale offer.
  • Analysts believe that Banque Nationale de Paris's higher offers have improved its chances of winning control of both banks, but may not be enough to guarantee a final win.
  • The bid battle has resulted in a 4.5 billion euro loss in market capitalization for the three banks since the state stepped in on 14 June.
  • Banque Nationale de Paris's prudential capital ratio would fall to below 7 per cent if its higher offers are accepted, which is below the industry norm of 6.5 per cent and lower than many comparable banks.
  • Investment banking sources do not rule out a higher Societe Generale bid for Paribas, but believe it is unlikely to move before the CMF's announcement.

Statistics:

  • 21bn euros: the amount Societe Generale is offering for Paribas
  • 40bn euros: the amount Banque Nationale de Paris is offering for Societe Generale and Paribas
  • 12.4 per cent: the improvement in the offer to Paribas shareholders after Banque Nationale de Paris raised its bid
  • 4.5 billion euros: the loss in market capitalization for the three banks since the state stepped in on 14 June
  • 6.5 per cent: the industry norm for prudential capital ratio
  • 21 July: the expected closing date for the bids

Sources:

  • "France's stock market regulator will today rule on the final timetable for the titanic bid battle involving three of the country's largest banks." - [Financial Times](https://www.ft.com/content/6c347f9e-43e3-11e7-bc4b-5528796f6d08)
  • "The CMF is expected to settle on 21 July as the closing date both for the 21bn euro offer by Societe Generale for Paribas and for the hostile 40bn euro bid by Banque Nationale de Paris for the other two banks." - [Financial Times](https://www.ft.com/content/6c347f9e-43e3-11e7-bc4b-5528796f6d08)
  • "Last week BNP raised its offers for both Paribas and Societe Generale in the wake of the collapse of attempts by Jean-Claude Trichet, the governor of the Bank of France, to broker a compromise deal." - [Financial Times](https://www.ft.com/content/6c347f9e-43e3-11e7-bc4b-5528796f6d08)
  • "The revised terms improve the offer to Paribas shareholders by 12.4 per cent, while the Societe Generale offer is now topped up with cash." - [Financial Times](https://www.ft.com/content/6c347f9e-43e3-11e7-bc4b-5528796f6d08)
  • "Michel Pebereau, the BNP chairman, made it clear that he did not regard the higher offers as final 'in the English legal sense' of the term." - [Financial Times](https://www.ft.com/content/6c347f9e-43e3-11e7-bc4b-5528796f6d08)