By Philip Blenkinsop
BRUSSELS, Feb 18 (Reuters) - Shares in financial services group Fortis shot up on Wednesday due to market speculation that an improved break-up deal was being secured with the Belgian state and France's BNP Paribas.
The shares hit a session high of 1.20 euros, a gain of 16.1 percent, although they were still below the level before last week's rejection by shareholders of the company's carve-up.
By 1510 GMT, the shares were up 5.4 percent at 1.09 euros.
'We're hearing a new deal is imminent,' a Paris-based trader said, while a Brussels-based trader said: 'I'm hearing that (new board member) Jozef De Mey has negotiated a better deal for Fortis.'
Other traders noted Fortis was often at the centre of a swirl of speculation and BNP Paribas would be reporting its 2008 results on Thursday, when it might comment.
BNP declined to comment on Wednesday. No one at Fortis was immediately available for comment.
In an interview published on the website of Belgian business magazine Trends, Fortis Chief Executive Karel De Boeck discussed a number of possibilities.
He said it made sense to involve the Netherlands in talks and did not rule out Fortis getting back its Dutch insurance unit, although it did not have the financial means to do so now.
De Boeck said it might be easier to reach a deal if BNP walked away, simply because discussions would involve just two partners -- Fortis and the Belgian state.
Belgium might then look into the way in which the Netherlands had provided a guarantee for the risky assets of ING that did not inflate the national debt.
Without BNP, Belgium would also not suffer the loss it had incurred on its BNP shares, priced for the deal at 68 euros.
De Boeck said it might be possible to sell 25 percent of its insurance activity to the Belgian state.
Fortis was carved up by the Dutch, Belgian and Luxembourg governments in October with BNP Paribas buying the Belgian operations within a week of an 11.2 billion euro ($14.1 billion) cash injection that failed to calm investor concerns.
The deals left Fortis Group with only its international insurance business and a 66 percent share of a 10.4 billion euro portfolio of structured credit products.
However, the Brussels appeal court froze the transactions in December and ordered that shareholders be allowed to vote on the deals, prompting the Belgian government and BNP Paribas to revise the terms.
Shareholders in Brussels voted by a wafer-thin margin last Wednesday against the Belgian state taking full control of banking arm, Fortis Bank. Belgium had planned to sell a majority stake in the bank to BNP.
Ivan Lathouders, analyst at Bank Degroof in Brussels, said BNP had said the deal was legally binding until Feb. 28.
'You have to assume that there will be some kind of deal or no deal by then,' he said.
BNP Paribas shares were down 1.1 percent at 23.75 euros, while the DJ Stoxx bank index was off 1.5 percent.
(Reporting by Philip Blenkinsop in Brussels, Blaise Robinson in Paris; Editing by Simon Jessop and Andrew Macdonald) ($1=.7941 Euro) Keywords: FORTIS/ (philip.blenkinsop@thomsonreuters.com; +32 2 287 6838; Reuters messaging: philip.blenkinsop.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
BRUSSELS, Feb 18 (Reuters) - Shares in financial services group Fortis shot up on Wednesday due to market speculation that an improved break-up deal was being secured with the Belgian state and France's BNP Paribas.
The shares hit a session high of 1.20 euros, a gain of 16.1 percent, although they were still below the level before last week's rejection by shareholders of the company's carve-up.
By 1510 GMT, the shares were up 5.4 percent at 1.09 euros.
'We're hearing a new deal is imminent,' a Paris-based trader said, while a Brussels-based trader said: 'I'm hearing that (new board member) Jozef De Mey has negotiated a better deal for Fortis.'
Other traders noted Fortis was often at the centre of a swirl of speculation and BNP Paribas would be reporting its 2008 results on Thursday, when it might comment.
BNP declined to comment on Wednesday. No one at Fortis was immediately available for comment.
In an interview published on the website of Belgian business magazine Trends, Fortis Chief Executive Karel De Boeck discussed a number of possibilities.
He said it made sense to involve the Netherlands in talks and did not rule out Fortis getting back its Dutch insurance unit, although it did not have the financial means to do so now.
De Boeck said it might be easier to reach a deal if BNP walked away, simply because discussions would involve just two partners -- Fortis and the Belgian state.
Belgium might then look into the way in which the Netherlands had provided a guarantee for the risky assets of ING that did not inflate the national debt.
Without BNP, Belgium would also not suffer the loss it had incurred on its BNP shares, priced for the deal at 68 euros.
De Boeck said it might be possible to sell 25 percent of its insurance activity to the Belgian state.
Fortis was carved up by the Dutch, Belgian and Luxembourg governments in October with BNP Paribas buying the Belgian operations within a week of an 11.2 billion euro ($14.1 billion) cash injection that failed to calm investor concerns.
The deals left Fortis Group with only its international insurance business and a 66 percent share of a 10.4 billion euro portfolio of structured credit products.
However, the Brussels appeal court froze the transactions in December and ordered that shareholders be allowed to vote on the deals, prompting the Belgian government and BNP Paribas to revise the terms.
Shareholders in Brussels voted by a wafer-thin margin last Wednesday against the Belgian state taking full control of banking arm, Fortis Bank. Belgium had planned to sell a majority stake in the bank to BNP.
Ivan Lathouders, analyst at Bank Degroof in Brussels, said BNP had said the deal was legally binding until Feb. 28.
'You have to assume that there will be some kind of deal or no deal by then,' he said.
BNP Paribas shares were down 1.1 percent at 23.75 euros, while the DJ Stoxx bank index was off 1.5 percent.
(Reporting by Philip Blenkinsop in Brussels, Blaise Robinson in Paris; Editing by Simon Jessop and Andrew Macdonald) ($1=.7941 Euro) Keywords: FORTIS/ (philip.blenkinsop@thomsonreuters.com; +32 2 287 6838; Reuters messaging: philip.blenkinsop.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.