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France spells out bank sale

THE FRENCH government yesterday outlined plans to sell shares in the bank Credit Lyonnais, one of the most prominent beneficiaries of state aid in recent years.

Up to 33 per cent of the bank will be offered to "shareholder partners", who will receive a seat on the board. Prospective shareholder partners, who will each be allowed to take stakes of 1 to 10 per cent, have until the end of the month to file bids.

Analysts predicted that a 10 per cent stake of Credit Lyonnais, France's fourth-biggest bank, could be worth up to $750m, and speculated that rival banks Credit Agricole, Societe Generale and Paribas could be among the bidders. "The final price is paid is going to depend a lot on just how much interest there is for the big stakes," said Alain Tchibozo, an analyst at CPR Finance.

The finance ministry said it intended to sell another 50 per cent of the bank by July in an initial public offering to the market. The government plans to keep 10 per cent and a small stake will be reserved for staff.

France promised to privatise the bank in exchange for European Commission approval of huge state bailouts.