BNP has met govt on possible SocGen bid: source

By Mathieu Robbins and Sudip Kar-Gupta

LONDON/PARIS (Reuters) - Executives of French bank BNP Paribas (BNPP.PA) sounded out the French government several weeks ago over a possible bid for scandal-hit rival Societe Generale (SOGN.PA), said a source familiar with the matter.

The source told Reuters on Thursday that the meeting allowed BNP Paribas, France's biggest listed bank, to evaluate whether it would face opposition if it were to make an offer for SocGen, which has been weakened by a huge internal trading scandal.

Earlier this month, a source told Reuters BNP Paribas was not planning a hostile bid for SocGen but could be interested in a friendly deal. BNP is also expected to bide its time while SocGen executes a 5.5 billion euro ($8.3 billion) rights issue.

A meeting with top officials was attended by Chairman Michel Pebereau and Chief Executive Baudouin Prot and took place in the framework of BNP evaluating, in the days after the January 24 announcement by SocGen of the trading scandal, whether to seriously contemplate bidding for its rival, said the source.

Many banks looked at the stricken French bank at that time.

"The meeting took place at least two or three weeks ago," said the source.

BNP Paribas just failed to buy SocGen in 1999 and the latter's recent problems have rekindled long-standing speculation of a tie-up between France's two biggest listed banks.

President Nicolas Sarkozy has supported a policy of "economic patriotism" and a BNP/SocGen combination would create a global top-five bank by market capitalization, headquartered in Paris. But it might also lead to job losses.

SocGen shares were up 3.4 percent at 71.36 euros in late afternoon trade, giving it a market capitalization of around 33 billion euros.

BNP Paribas shares were down 4.5 percent at 61.05 euros, valuing BNP at around 56 billion euros.

CASH-AND-SHARE BID RUMOURED

On January 24, SocGen reported 4.9 billion euros of losses which it blamed on rogue deals carried out by Jerome Kerviel, a 31-year-old junior trader.

The bank's woes have made it a likely bid target and, on Jan 31, BNP Paribas said it was studying a possible bid for SocGen.

Magazine Le Point had earlier reported on Thursday that BNP Paribas was lobbying the French government to support any bid it might make for SocGen.

However, a BNP Paribas spokesman said that the last time Pebereau and Prot had been to the Elysee Presidential office was for an awards ceremony last Tuesday.