BNP eyes SocGen, France warns off foreign bids

By Andrew Callus and Anna Willard

PARIS (Reuters) - BNP Paribas (BNPP.PA: Quote, Profile, Research, Stock Buzz) confirmed on Thursday it was studying a bid for scandal-hit rival Societe Generale that could bring the country's two biggest banks together, while France told foreign predators to stay away.

"We are studying it because all Europe's banks are studying it," said a spokesman for BNP.

SocGen (SOGN.PA: Quote, Profile, Research, Stock Buzz) declined comment, but the weakened bank's shares closed up 1.7 percent at 83.20 euros, putting its stock market value at 39 billion euros ($59 billion), about two-thirds that of BNP, whose stock closed down 1.5 percent at 65.83 euros.

In 1999, SocGen escaped a takeover bid by BNP and there has been consistent market speculation ever since. It was rekindled a week ago when SocGen's disclosed 4.9 billion euros of losses and blamed them on a single employee, Jerome Kerviel, kicking off the biggest rogue trader scandal in history.

The affair was still unrolling on Thursday after police raided a Paris flat to seize Kerviel's computer, and as a clutch of investigations into how and why the bank's systems failed to prevent the debacle got under way.

GSD Gestion fund manager Jacques Gautier said a tie-up would be good for shareholders in both banks.

"In terms of the French retail banking network, it will double BNP's capacity. There would also be cost cuts as the two banks overlap in many areas," he said.

Meanwhile, France was heading for a clash with its European Union partners over whether foreign bidders should be allowed a free hand.