20.04.2009 17:16 Fortis shareholders unveil alternative to BNP deal By Philip Blenkinsop
BRUSSELS, April 20 (Reuters) - Shareholders opposed to the sale of stricken Belgian-Dutch group Fortis's banking business to France's BNP Paribas (News/Aktienkurs) unveiled their vision of a viable 'stand-alone' alternative on Monday.
Mischael Modrikamen, a lawyer representing some 2,400 Fortis (News/Aktienkurs) shareholders, and Pierre Deminor, partner of investor activist group Deminor, argued the Belgian state, Fortis investors and the group's staff would benefit under their plans.
The restored banking business should be able to generate a net profit of 1.6 billion euros to 1.8 billion euros ($2.1 to $2.3 billion) by 2011, when Fortis shares could be worth between 6 euros and 8 euros, compared with 1.55 euros now, the two contended.
French bank BNP Paribas is poised to buy 75 percent of Fortis Bank Belgium, which was once the banking arm of listed Fortis Holding but is now in state hands.
'It was a fire sale at the worst moment,' Modrikamen told a news conference on Monday.
That deal will be put to shareholders at votes in Belgium and the Netherlands on April 28 and 29 and Modrikamen and Deminor need them to vote 'no' for their plan to become reality.
'A month ago, people were more cautious, but with the pick-up of the markets since there is now a broad consensus among our members for the stand-alone,' Nothomb said.
'We have a week to go. I think there is still a chance to get a majority voting against.'
Investors rejected previous terms of the deal in February. However, all shareholders will now be able to vote, not just those holding shares when Fortis was broken up in October.
More recent investors, including hedge funds, stand to make a sizeable profit, compared with the huge losses of longer-standing shareholders, making a 'yes' vote more likely.
The Belgian government has constantly favoured selling the banking assets to BNP Paribas. Fortis has argued it could not afford to buy them back and that its exposure to toxic assets would rise.
Belgium would remain heavily involved providing guarantees even if the BNP deal went through and had already taken a heavy loss on the BNP shares it received as payment -- valued at 68 euros against some 38 euros now.
The shareholder groups also believed that BNP Paribas's synergy target of 500 million euros in savings could lead to the loss of 5,000 Fortis Bank jobs in a very short period. Under their plan, 2,800 jobs would go.
They argued Belgium should transfer a 50 percent plus one share stake in Fortis Bank Belgium to Fortis in return for a stake of about 30 percent in the listed group.
Fortis would be able to buy the Belgian state out of the bank within four to seven years.
The shareholder groups believe that an 11.4 billion euro portfolio of structured products that Belgium and Fortis would share faces a maximum further writedown of 2.1 billion euros. It could also improve given it is already written down by more than 40 percent.
Fortis, weighed down by its 24 billion euro purchase of the Dutch parts of ABN AMRO, was carved up in October after an 11.2 billion euro cash injection failed to calm investors. The Netherlands has already taken over all the Dutch activities. |