BNP Paribas attempts to appease Fortis shareholders
by Gill Montia
Disgruntled shareholders in Fortis’s Belgium operations have new proposals to consider from BNP Paribas.
In October of last year, the French bank announced it was acquiring the Belgium and Luxembourg businesses of the European finance and insurance giant, which had previously been in need of a multi-billion injection of cash from the government.
However, shareholders rejected the deal in February, leaving a question mark over the group’s future.
BNP Paribas has been working with the Belgian government on a new deal which involves a €2.88 billion all share transaction for 75% of Fortis Bank.
BNP will also pay €1.38 billion for a 25% stake in the Belgian insurance operations of Fortis Holdings; the remainder of the business will be retained by shareholders.
For its part, the Belgian government will underwrite losses of up to €1.5 billion regarding certain of Fortis Bank’s investments, and will also underwrite fundraising of €2 billion during the next three years.
The deal still needs the approval of shareholders who will vote on the proposals in April.
If successful, the BNP bid could fulfil the French bank’s ambitions of expanding into Belgium and Luxembourg and becoming the biggest bank by deposits in the eurozone.
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