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France opposed to any hostile SocGen bid
2008-02-02
A senior adviser to French President Nicolas Sarkozy said France remained opposed to any hostile bid for Societe Generale (SOGN.PA), the French bank hit by a trading scandal. In an interview with French newspaper Le Parisien to be published on Sunday, Sarkozy's chief of staff Claude Gueant said France preferred a "friendly" solution for SocGen should it end up as a bid target. "For the public authorities, one thing is clear: a friendly solution would be preferable to a hostile attack from any kind of financial establishment," Gueant was quoted as saying. On January 24, SocGen revealed 4.9 billion euros ($7.28 billion) of losses which it blamed on rogue trades made by Jerome Kerviel, a 31-year-old employee of the bank. Kerviel is under investigation. Despite these losses, SocGen shares have recently risen on the back of bid speculation. Leading French politicians have said they want SocGen to remain in French hands. Many analysts say this would mean that rival French banks BNP Paribas (BNPP.PA) and Credit Agricole (CAGR.PA) would be best placed to bid for SocGen. RENEWED CRITICISM OF SOCGEN Asked about long-standing speculation that BNP Paribas might bid for its cross-town rival, Gueant replied: "It's up to Societe Generale to determine its own future. "Should it come out of the crisis alone or by joining up with another bank? It's up to SocGen's board to decide. It's also up to the market to give it some indications. We are in an open and liberal system," he said. BNP Paribas narrowly failed to buy SocGen in 1999. Last month, SocGen fought off political pressure to sack its chairman in the wake of the trading debacle. A board meeting on Jan 30 decided the bank should stick with executive chairman Daniel Bouton and his deputy Philippe Citerne to help SocGen through its difficulties. Gueant renewed criticism from leading politicians over SocGen's handling of the affair. Sarkozy has said the bank's leaders had to face up to their responsibilities. Asked whether he thought it was normal that Sarkozy had been alerted so late to SocGen's problems, Gueant replied: "To be quite frank, I think that the President was warned after a delay that is not normal." SocGen shares closed up 5.5 percent at 87.80 euros on Friday, giving the bank a stock market value of around 40 billion euros. BNP Paribas, France's biggest listed bank, has said it is looking at making an offer for SocGen. Its shares closed down 0.8 percent at 65.28 euros, giving BNP Paribas a market capitalization of roughly 60 billion euros. (Reporting by Sudip Kar-Gupta; editing by Robert Woodward)
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