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. Last Updated: 07/27/2016

Societe Generale Raises Bid For Paribas in Merger Feud

PARIS -- French bank Soci?t? G?n?rale has raised its friendly offer for Paribas in an attempt to fend off hostile bids for both banks by rival Banque Nationale Paris.

The surprise move Monday places the ball firmly back in BNP's court, all the more so as AXA chairman Claude Bebear, long an advocate of a three-way bank merger, voted in favor of the higher SocGen offer.

SocGen and Paribas agreed to a friendly merger in February, but the game plan was upset when BNP launched a bold unsolicited bid for both banks just over a month later, sparking the protracted takeover battle that now looks set to be extended once again.

A BNP spokeswoman declined to comment on the raised bid. She said the bank's board would meet Wednesday, adding that the meeting had been scheduled before SocGen's move.

A Paribas spokesman said the board had been informed of the new bid, but had no plans to convene. The Paribas board has rejected BNP's bid and approved SocGen's friendly merger proposal twice.

The SocGen move came two days before the Paris Appeal Court was due to rule on a legal challenge to BNP's bids by the target banks. The court was expected to reject the appeal, their last line of defense other than changing the merger terms.

The attraction of BNP's double bid is that it would combine the largely similar domestic banking networks of SocGen and BNP, which is expected to generate considerable cost savings, with the investment banking expertise of Paribas.

SocGen said Monday that it was offering investors a choice between a cash supplement to its initial five-for-eight share-swap bid, or a revised offer of two SocGen shares for three Paribas shares.