Finance and Economic

BNP Paribas has walked away from a possible bid for smaller rival Societe Generale, which has been seen as a takeover target after suffering a rogue-trading scandal.

“Given the persistent rumors, BNP Paribas clarifies that it has ceased to consider a potential tie-up with Societe Generale,” BNP Paribas, France’s biggest listed bank, said in a statement on Wednesday.

“If a French bank that knows the market doesn’t want it, then it’s unlikely that anyone else will,” said Ion-Marc Valahu, head of trading at Amas Bank in Switzerland.

BNP Paribas shares were up around 5 percent in mid-morning while SocGen fell 7 percent. SocGen has a market capitalization of around 30 billion euros ($47.44 billion) while that of BNP Paribas stands at around 56 billion euros.

“It’s obviously bad news for SocGen shareholders. Nevertheless, it was expected and we had anticipated it since BNP would not have taken that much time if it really wanted to make a bid,” said Iris Finance fund manager Michael Sellam, who holds SocGen shares.

A source close to the matter said BNP Paribas came to its decision because of SocGen’s opposition to any tie-up and as BNP would not make a hostile bid faxless payday loans. The announcement means BNP Paribas is prevented from bidding for SocGen for six months.

In January BNP, which narrowly failed to buy SocGen in 1999, said it was looking at its rival. SocGen became vulnerable to a bid after announcing 4.9 billion euros of losses which it said were caused by rogue deals carried out by one of its traders. Jerome Kerviel.

The source said uncertainty in financial markets over the credit crisis and the investigation into Kerviel also contributed to BNP’s decision. 

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