French banks reject AXA deal-broker

SOCIETE GENERALE and Paribas, the two French banks at the centre of France's financial soap opera, have flatly rejected an offer from Claude Bebear, the chairman of AXA, to attempt to broker a compromise deal with hostile bidder BNP.

Mr Bebear, who was the catalyst behind both the original SG Paribas merger in February and the subsequent counterbid by BNP, said on Wednesday that he would be "more than delighted to act as go-between" between the two warring camps. However, Jean Clamon, senior Paribas director, said in London yesterday that there was no way such a proposal would work as the two sides have completely different "visions" of what their merger proposals were meant to achieve.

"The reason why BNP wants a friendly deal is because to win a hostile bid it has to offer a 25 per cent premium," he said.

"It just wants to save itself some money."

The role of the AXA chairman has been a running theme in the bid battle from the start. Paribas and Societe Generale are still smarting over the way Mr Bebear backed their two-way merger and then, after failing to broker a friendly three-way deal with BNP in February, switched sides when BNP launched its hostile three-way bid in March.

Said one analyst yesterday: "There is no way they could have agreed to Mr Bebear's offer. There is too much bad blood between them."

Mr Bebear's offer to intercede followed a ruling by the COB, one of several French regulators involved in policing the ill-tempered bid battle, that Paribas could not hold AXA to a ten-year-old shareholder pact.

Paribas had claimed that the pact meant that the insurance giant, which has 8.7 per cent of Paribas, could not vote its shareholding in favour of the hostile bidder, BNP.