Agricole set to clash with BNP over SocGen by Finance News Bulletin
Published: 15/04/08
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Crédit Agricole was on Friday on course for a showdown with BNP Paribas, its biggest French banking rival, after it lined up advisers for a possible approach for Société Générale, a day after BNP declared its interest in a takeover.
A French bid for SocGen is seen as the most likely outcome after President Nicolas Sarkozy said approaches from foreign banks were not welcome in the wake of SocGen’s €5bn ($7.4bn) rogue trading scandal.
Agricole and BNP have clashed before. In 2003, BNP swooped to spoil Agricole’s long-planned merger with Crédit Lyonnais, but it was beaten by a knock-out bid from Agricole, the bank that is still controlled by mutual lenders with roots in financing farmers.
SocGen shares rose almost 6 per cent on Friday to €88.10, their highest level since before the rogue trading scandal erupted last week, valuing the bank at more than €35bn.
Agricole, with about 9,000 branches including Lyonnais outlets, equivalent to about 30 per cent market share in France, is likely to be blocked from buying SocGen’s 3,000-odd French branches by the competition authority. But it is interested in SocGen’s strong presence in eastern Europe and parts of its rival’s investment banking business, which could bolster its own Calyon division.
But both Agricole and BNP would face significant obstacles to any takeover bid and they are rumoured to be considering a joint break-up bid for SocGen.
Agricole could have difficulty persuading the regional banks that control it to back a big acquisition in investment banking – an activity they distrust, especially after a trader in its New York office lost €250m on an unauthorised position.
People familiar with Agricole said it was lining up Citigroup and Lazard to advise it on SocGen. BNP is working closely with Goldman Sachs and Lehman Brothers. The government has made it clear a hostile bid would be unwelcome.
SocGen has hired Rothschild to work on its defence, alongside Morgan Stanley and JPMorgan, which are arranging its planned €5.5bn rights issue.
Separately, it emerged on Friday that Daniel Bouton, SocGen’s chairman, sold €3.3m stock options last year, when the shares were worth almost double what they are now.
Also on Friday, BNP admitted it had interviewed Jérôme Kerviel, the man SocGen has blamed for the rogue trader loss, for a job in 2006. When Mr Kerviel was questioned by police they found the business cards of the two BNP executives who had interviewed him. “No subsequent offer of employment was made,” said BNP.Copyright The Financial Times Limited 2008
Analysis: Custom and practice, or a man with a lot to prove? - Feb-01Paul Betts: The French-American dream - Feb-01BNP considers SocGen approach - Jan-31SocGen front line shifts to back office - Jan-31Police search apartment of trader’s brother - Jan-31Comment: Risks of fraud go well beyond SocGen - Jan-31More in this section
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