Fortis investors reject break-up, BNP deal in doubt
BRUSSELS (Reuters) - Shareholders of Fortis on Wednesday rejected the state-led deals that carved up their stricken financial group, delivering a potentially fatal blow to BNP Paribas' Belgian expansion plans.
Faced with heavy losses and the prospect of a share of toxic assets, they first voted against the Netherlands's purchase of Fortis' Dutch assets by a 57 percent majority.
Then, by a wafer-thin 50.3 percent, they rejected Belgium's move to take control of banking unit Fortis Bank.
Acting Fortis Chairman Jan-Michiel Hessels said it made no sense to proceed to the third and final part of the carve-up -- BNP Paribas's purchase of 75 percent of Fortis Bank and a stake in the Belgian insurance operations from Fortis.
The Belgian government, which collapsed over the Fortis debacle in December, has been desperate to close the deals.
Finance Minister Didier Reynders told Belgian news agency Belga that the BNP tie-up remained the best option and that the cabinet would likely meet on Wednesday evening.
The Dutch and Belgian deals have already closed, although will likely prompt legal appeals for damages. The Dutch government said its deals were legal and irrevocable.
BNP Paribas also said on Wednesday an initial agreement, signed last October, to buy the Fortis assets remained legally binding.
"BNP Paribas notes today's result of Fortis' shareholder meeting. BNP Paribas appreciates the positive vote cast by a large number of shareholders and the support of so many of Fortis Bank employees," it said in a statement.
"BNP Paribas points out that only the original protocol signed on October 10, 2008 remains valid until February 28, 2009," it added.
Some 5,000 investors had gathered in Brussels to vote on the situation and spent five hours in heated debate.
The meeting was called after shareholders won a legal battle freezing the state-led break-up of their company in October and the sale of mostly Belgian assets to BNP.
Fortis Bank said it noted the shareholders' decision and added it would make a statement on the situation in due course.
BLOW TO BNP
BNP's ambition of becoming the euro zone's biggest deposit-holder by pushing into Belgian and Luxembourg is now under threat. BNP Paribas shares closed down 2.1 percent at 27.80 euros. Continued...
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