Edmond Alphandery, minister of the economy, yesterday announced a protective ring of shareholders with a surprisingly international flavour. Together they will hold 30 per cent of France's third-biggest bank, which at the privatisation price is valued at Fr43bn ( pounds 4.95bn).
Half of the 30 per cent will belong to the state-owned insurance group Union des Assurances de Paris, which at present has 10 per cent of BNP.
With a long history of influence over the banking system, the French government has gone to considerable lengths to ensure that BNP is not put into play in the markets once control moves to the private sector.
Furthermore, a friendly share swap is expected to take Dresdner Bank of Germany to a 10 per cent stake after the sale. Dresdner is now on the list of core shareholders with a 1 per cent stake.
Last week Michel Pebereau, chairman of BNP, denied that the shareholding structure would be any more protectionist than the systems used to safeguard national ownership of important banks in other European countries, though he said the means employed in Germany and the UK were different to those in France.
The management of BNP has been emphasising that it will behave independently of government under private ownership and not fall into old habits of taking orders from ministers. The government has also been distancing itself from the management of the state- owned banks, whose chairmen have usually been appointed by ministers from the ranks of senior bureaucrats. In future they will be appointed by shareholders, though some of those - such as UAP, the largest - are state-owned.
The other core shareholders announced by Mr Alphandery are the two state-controlled companies Elf Aquitaine and Rhone-Poulenc, which are to be privatised next, Saint-Gobain, Financiere et Immobiliere Marcel Dassault, PSA, Renault, the Kuwait social security fund, Pechiney, Hoffmann-La Roche of Switzerland, Compagnie Generale des Eaux and Saint-Louis. Individual core shareholdings are mostly between 0.5 per cent - the amount BAT is buying - and 1 per cent.
Mr Alphandery revealed an unexpectedly low price for the first in the government's new wave of large-scale privatisations, which observers suggested could be to help prepare the ground for the rest of the big sales. The market has also been gambling on an interest rate cut to get the privatisations away to a flying start, though it was disappointed yesterday.
An offer of shares to private and institutional shareholders will be at Fr240 a share compared with the Fr250-270 range that officials had suggested to the French press. Core shareholders will pay Fr249.50, a 4 per cent premium.
Analysts said the low price reinforced the attractions of the public offer. Market sources say institutions have indicated strong interest during a pre-marketing campaign over the past few weeks.
The sale, which gets under way this morning, will raise Fr28.2bn for the government and value the bank, 12th-largest in the world ranked by total assets, at Fr43bn.
Of the proceeds, Fr17.3bn will be from the offer to the investing public and institutions, which will receive 72 million shares, representing 40 per cent of the equity.
A further Fr6.9bn of proceeds will come from core shareholders. Staff are to receive Fr1.5bn worth of shares. Owners of non-voting shares will pay Fr5 a share for enfranchisement. Trading in these was suspended last week at Fr277.
The amount for institutions and core shareholders will be reduced if necessary to accommodate heavy private demand. Any EC citizen with a bank account and a share account in France will have a priority right to 40 shares.
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