Under the proposal, BNP and Societe Generale would merge their retail businesses while Societe Generale and Paribas would proceed, as planned, with the merger of their corporate and wholesale banking business.
The proposed solution would also involve an agreement between the three banks to go for a full-blown three-way merger some 12 months after the first stage of the consolidation is complete. There has also been talk of including the asset management businesses in the first stage deal. The idea of a staged merger to get around objections that thethree-way deal proposed by BNP is unworkable has emerged as the heads of the three banks prepare for a further round of meetings with Mr Trichet, who is seeking a settlement after more than four months of public mud-slinging. The compromise deal would also, say proponents, enable Paribas and SocGen to soften their hitherto implacable opposition to the BNP merger offer without losing face.
The drawback is that such a deal would smack of bureaucratic fudge and risk alienating the shareholders of all three banks who would almost certainly prefer a straightforward deal struck on economic rather than political grounds.
There is little sign of any movement, particularly on the SG Paribas side in the wake of Mr Trichet's intervention. SocGen and Paribas last week repeated their opposition to a deal with BNP despite Mr Trichet's public call on both sides to set aside existing merger plans and work towards a compromise deal. They insisted that any politically brokered compromise was damaging to shareholders' interests.
The latest developments have done little to diminish investor appetite for the Credit Lyonnais privatisation offering which was said to have been more than 10 times oversubscribed by late last week.Reuse content