BNP offers SocGen posts to aid merger

BANQUE NATIONALE de Paris is preparing to offer Daniel Bouton, the chairman of Societe Generale and other senior bank executives top management positions in an bid to soften their opposition to a merger.

The banking regulatory committee, the CECEI, headed by Jean-Claude Trichet, the governor of the bank, meets today to debate the outcome of the two competing bids that resulted in BNP taking control of Paribas at the weekend but failing to win a clear outright majority of SocGen. Sources close to the CECEI said a public ruling was unlikely before next week.

BNP claims the 31.5 per cent stake it obtained in SocGen gives it effective control and the bank has vowed to exercise it by convening a shareholder meeting to remove the existing management and force through its merger proposals against the wishes of the current board. But Michel Pebereau, the chairman of BNP has indicated he is still willing to compromise to secure SocGen's agreement to a three-way merger deal.

Daniel Bouton, the SocGen chairman, said yesterday he would be prepared to discuss new proposals. "I am ready to enter discussions with BNP," he said. "But I am very sceptical because we spent 40 hours in negotiations in June without reaching agreement and shareholders have made their position known in a very clear manner."

In a memo to SocGen employees, Mr Bouton said the bank would consider European partnerships but insisted it was in a very strong position despite losing the Paribas merger, and ties with other European banks was a longer term question.

Mr Bouton has asked Mr Trichet to honour undertakings he made in a letter of 14 July that he would disallow hostile minority stakes in banks involved in the takeover battle.

Bernard Walter, the chief executive of BNP's German ally Dresdner Bank said the bank was keen to deepen its relationship with BNP "beyond co- operation" but refused to elaborate.

Dresdner yesterday reported a 31.5 per cent rise in first half pre-tax profit to 880m euros helped by a 170 per cent rise in trading profits to 700m euros at Dresdner Kleinwort Benson, its investment banking division.

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