Lionel Jospin, the French Prime Minister, is taking a close interest in developments. Sources said that he may call a meeting with the heads of the two banks within the next few days in an effort to broker a deal. Mr Jospin is adamant that no French bank should be allowed to fall into foreign hands.
The French banking regulator, the Cecei, yesterday postponed for a week its decision on whether to allow BNP to keep the 37 per cent stake it won in its rival. The move is seen as a deliberate attempt to force SocGen's chairman Daniel Bouton to come to the negotiating table.
Philippe Citerne, Mr Bouton's number two, accepted yesterday that BNP's plan has strong support in government circles: "This is a strong political message - they want to take a week to explain to us that we should be reasonable, to try to find a very French solution to the problem."
However, Mr Citerne indicated that the bank was in no mood to compromise: "Why do you need to week to understand a message sent to you by the market: BNP lost the battle for SocGen."
As both sides kept up the war of words, Michel Pebereau, the BNP chairman, said that he was prepared to consider any changes to make the offer more attractive to SocGen that were consistent with maintaining shareholder value.
BNP insists that its shareholding in SocGen gives it effective control of the rival bank. Mr Pebereau said yesterday that the bank had received indications from two major American investment firms - who had been unable for technical reasons to tender their shares - that they would back a BNP sponsored resolution at a SocGen shareholder meeting to agree the three-way merger, if necessary over the heads of the current board.
Excluding treasury stock, that would give BNP 39 per cent of its rival. French takeover rules also allow the bank to acquire up to 2 per cent of SocGen over the next year without having to rebid.
"I don't understand why Societe Generale is asking the government to intervene to stop us from keeping the shares which were freely tendered to us by shareholders," Mr Pebereau said.Reuse content