France Warns SocGen PredatorsBy Reuters - | Posted 2008-01-29 Email Print
France warned foreign banks not to try to grab control of Societe Generale as it reels from losses blamed on a rogue trader, but shares in the bank spiked higher on takeover speculation.
PARIS (Reuters) - France warned foreign banks on Tuesday not to try to grab control of Societe Generale as it reels from losses blamed on a rogue trader, but shares in the bank spiked higher on takeover speculation.
"The government is determined that Societe Generale remains a great French bank," Prime Minister Francois Fillon told parliament.
Earlier Fillon told reporters: "The government will not let Societe Generale be the object of hostile raids by other companies."
SocGen shares ended the day up 10.4 percent at 78.45 euros, spurred on by a rumor that rival France's biggest listed bank, BNP Paribas, might launch a bid. BNP, which made a failed bid for SocGen in 1999, declined to comment on the market talk.
Analysts, however, were skeptical that a bid for SocGen was imminent because the bank had not been mortally wounded.
"SocGen has taken a hit, but it does not need to be more than a flesh wound," said Simon Maughan at MF Global.
SocGen said on January 24 it had uncovered massive unauthorized stock trading by one of its employees that led to 4.9 billion euros ($7.2 billion) of losses, the world's biggest rogue trading scandal.
Jerome Kerviel, a 31-year old junior trader, was placed under investigation for breach of trust and other misdeeds on Monday, but judges threw out the stronger accusation of fraud made by the bank and prosecutors freed him on bail.
SocGen has been forced to launch a capital increase to raise 5.5 billion euros to cover the losses, as well as a 2.1 billion euro writedown resulting from the subprime crisis, but its balance sheet is otherwise strong.
The future of SocGen chairman Daniel Bouton has been left hanging by a thread as the government called for changes at the helm after the scandal.