France's biggest bank is considering a bid to buy its embattled rival, even as SocGen shares closed up 1.7% Thursday
BNP Paribas yesterday gave its first hint that it may bid for Société Générale since its arch rival became vulnerable to takeovers in the wake of last week's rogue trading scandal.
A spokesman for BNPP, which in 1999 had a bid for SocGen rebuffed, said: "We are studying it because all Europe's banks are studying it."
The banking group later back-peddled, saying its statements had been blown out of proportion. "Like everyone in Europe we're thinking about what this means for us and nothing more," it said.
A source close to SocGen also sought to play down the rumours, saying: "All banks have teams paid to look at rivals when their shares fall to a certain level. We're not worried about a bid."
Nevertheless, SocGen's shares closed up 1.7 per cent yesterday at 83.30. The bank has become the focus of takeover speculation since the revelation that it had lost almost 5bn last Thursday. The losses were brought about when the bank unwound 50bn-worth of unauthorised futures trades made by 31-year-old derivatives trader Jerome Kerviel during the stock market slump on "Black Monday".
BNPP has been mooted as the favourite should SocGen lose its independence, although the management declined to answer related questions at its results announcement on Wednesday.
Kimon Kalamboussis, an analyst at Citigroup, said in a note that "in-market, BNPP and SocGen have been regarded as a 'natural'" combination". He said a merger would provide scale in domestic retail banking, and team SocGen's strength in equity derivatives, with BNPP's presence in fixed income.
This would not be BNPP's first attempt to buy its rival. In 1999, SocGen agreed a friendly merger with the then independent Paribas. The deal was effectively ambushed as Banque Nationale de Paris launched an audacious $39bn hostile bid for both banks shortly after.
BNP won control of Paribas after an acrimonious battle, but was ordered to sell its 37 per cent stake in SocGen by the French banking regulator Cecei.
Other names to emerge as potential bidders this week, include Banco Santander and BBVA of Spain, HSBC and Barclays in the UK and domestic rival Credit Agricole.