Belgium, Luxembourg scramble to sell Fortis

By Philip Blenkinsop and Michele Sinner

BRUSSELS/LUXEMBOURG (Reuters) - Belgium and Luxembourg scrambled on Saturday to find a buyer for the remains of troubled financial group Fortis (FOR.BR) (FOR.AS) and mulled a further nationalization after the Netherlands took over its Dutch units.

The break-up of the cross-border banking and insurance group, less than a week after a first rescue attempt in which the three governments injected 11.2 billion euros ($15.4 billion), highlighted the ferocity with which the global crisis has swept into Europe.

Luxembourg's economy minister said French bank BNP Paribas (BNPP.PA) was one possible bidder for parts of Fortis and a solution had to be found by the end of the weekend.

"BNP Paribas is one among many possibilities," Jeannot Krecke told Luxembourg's RTL radio station.

"Now we have to return to the solution we were looking at last Sunday, that is to find a strong partner because the Belgian government is the main shareholder of Fortis Luxembourg and that situation will be remedied this weekend."

The Dutch government bought the banking and insurance units of Fortis in the Netherlands on Friday for 16.8 billion euros, including most of Dutch bank ABN AMRO, after depositors and lenders fled the bank.

The second bailout in six days came on the eve of Saturday's Paris summit of the leaders of Europe's four major powers with the heads of European Union financial institutions to seek a common response to the credit crisis.

SALE OR NATIONALISATION?

A Belgian source familiar with the situation said the only solutions for the rump Belgo-Luxembourg group were a sale to the private sector or further nationalization to protect depositors and save as many as possible of the 45,000 jobs at stake.

"Leaving things as they are now is not a realistic option," the source said.

Belgian business daily De Tijd quoted political sources as saying there were three or four would-be bidders for the Belgian activities of Fortis, including BNP. But a source told Reuters that there appeared to be fewer.

BNP Paribas, which sources said had offered 1.6 euros a share for Fortis a week ago, declined to comment. Fortis shares stood at 5.42 euros at Friday's close, before the Dutch nationalization and break-up was announced.

A source close to Fortis said the board was holding crisis meetings at Fortis's Brussels headquarters, with announcements due at the end of the weekend or the start of next week.

However, Finance Minister Didier Reynders told Belgian RTBF television on Saturday evening that the government would not necessarily be taking decisions in the next few days.

His comments came after core members of Prime Minister Yves Leterme's government met, ostensibly to discuss the 2009 budget.