Sunday April 26, 07:57 PM
Chinese insurer to vote against BNP takeover of Fortis Bank
By Sophie Estienne
BRUSSELS (AFP) - Chinese insurance group Ping An on Sunday delivered a major blow to BNP Paribas (Paris: FR0000131104 - news) ' hopes of taking over stricken Belgian bank Fortis (Amsterdam: FORAL.AS - news) by vowing to vote against the deal at special meetings this week.
"We believe that the dismantlement of Fortis, which was not approved by shareholders, violates corporate governance procedures and destroys shareholder value," Ping An said in a statement.
"Other credible and viable solutions exist and should be considered, in the interest of all parties. Such solutions could maximize benefits to Fortis' clients, employees and the society in which it operates," it added.
Ping An has 4.8 percent of Fortis Holdings which is to hold shareholder meetings in Belgium on Tuesday and the Netherlands on Wednesday to vote on the deal. The Chinese firm said it wanted to defend a "longstanding Belgian financial brand."
Fortis Holdings was broken up last October as the financial crisis hit head on. The Netherlands government nationalised its Dutch bank-assurance activities and Belgium took over Fortis Bank while proposing to sell a 75 percent stake to BNP Paribas of France.
Many shareholders have complained however that they believe the French giant is getting Fortis on the cheap.
The dispute helped bring down Belgium's coalition government in December and the new government under Hermann Van Rompuy has twice changed the accord with BNP Paribas in an effort to get it accepted by shareholders.
The second version of the deal was proposed after a shareholders meeting on February 11 voted against a BNP Paribas takeover of Fortis Bank.
The French bank must secure agreement from both votes this week to be able to go ahead. BNP Paribas chairman Baudoin Prot has said his institution will withdraw definitely if it is rejected by either meeting in Belgium or Netherlands.
Prot has also insisted though that a Belgian would be chosen to lead the bank and that all decisions would still be taken in Brussels.
Opponents of the deal have said Belgium is in danger of losing control of its major national enterprises, after electrical utility Electrabel (Brussels: ELEB.BR - news) was taken over by GDF-Suez (Paris: FR0000120529 - news) of France.
They tried to have new shareholders in Fortis Bank excluded from the vote on its future because they might be more tempted to vote with BNP Paribas.
Small shareholders last week came up with their own rescue plan for Fortis Bank, which made a loss of 20.6 billion euros in 2008. They said the bank could make a net profit of up to 1.8 billion euros in 2011.
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