CGU defends French bank move

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BOB SCOTT, chief executive of CGU, Britain's biggest composite insurer, yesterday defended his decision to intervene in France's banking bid battle with an 11th-hour share purchase two weeks ago which may have put Societe Generale beyond predator BNP's grasp.

"We made a decision to support the independence of SG," he said. "We have been a long-term shareholder in SG and the investment had produced very good returns." He said that 65 per cent of insurance sold in France is sold through banks. The group had been working on a European bancassurance venture with SG before it was put on hold pending the outcome of the bid battle which will be decided next week. CGU's decision to increase its stake in SG from 3 per cent to 6.9 per cent has been hugely controversial in France. The French stock market regulator has frozen the shares because of concern that the off-market purchase may have breached French takeover rules.

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