Societe Generale offered five of its shares and 75 euros for eight Paribas shares, raising its offer from five SG shares and no cash. The new bid is valued at 125.63 euros per share, or an 11.8 per cent premium to Paribas' closing price today of 112.4 euros.
On 9 March SG was about to complete an pounds 11.8bn takeover of Paribas when BNP gatecrashed deal by offering pounds 23.6bn for both companies.
The hostile bid, which would result in the world's only bank with more than $1,000bn in assets, prompted French regulators to postpone the SG/Paribas merger.
Investors now expect an improved bid from BNP. "It's not over; BNP is going to respond with another offer for SocGen,'' said Marc Renaud of CCR Actions in Paris.
Jerome Fourre, spokesman for SG, said the company was addressing investor concerns about its bid's value by adding cash to the offer. "We believe this will be enough to ensure the SocGen/Paribas project becomes a reality,'' he said.
As an alternative, Paribas shareholders can receive two Societe Generale shares for three of theirs.
Without the cash component, they will not be liable for capital gains taxes until they sell shares. The second offer, limited to 30 per cent of Paribas shares, is at a 10.3 per cent premium to today's price. Under its latest bid, SG and Paribas would buy back as much as 2.5bn euros of stock within 18 months of the merger and cancel the shares.
On Thursday, SG and Paribas will hear the results of a lawsuit asking the Paris Appeals Court to overturn regulatory approval of BNP's hostile bid.
If the ruling is made in favour of BNP, shareholders will have to vote on whether to accept BNP's offer or approve the two-way SG/Paribas merger.Reuse content