SG Comes Out Fighting

The French crisis-hit bank, Société Générale is displaying signs of desperation as it pulls out all stops to deter the circling takeover wolves from attacking.

In a strange move on Friday the bank ran full page ads in major international newspapers, including The Financial Times and The South China Morning Post, to promote its acquisition of Russia’s Rosbank.

In addition to SG stressing it was “going forward, taking action” – as the huge red font cried out in the various newspapers – the 144 year-old bank reminded us all that it now had more than 150,000 staff operating in 82 countries.

It was hard to believe however this ‘on the front foot’ PR campaign was not meant to offset the news coverage on Friday that the bank had suffered a €3.35 billion loss in the fourth quarter of 2007 – in part due to €2 billion in sub-prime write downs and the fraud of trader Jerome Kerviel.

With the market well aware a number of major groups are running slide rules over the group, the full page ads may have been seen by some as a bid to push up the attractiveness of the bank.

However SG’s under siege executive chairman, Daniel Bouton, remains adamant he and the group’s senior executives will do all in their power to maintain the firm’s independence after a series of ‘steel jawed’ comments to the media of late.

Unfortunately for Bouton and co, SG’s most likely suitor – France’s biggest bank BNP Paribas - has already had senior staff meet with the French Government.

BNP is believed to be pushing the argument that SG will fall victim of acquisition and the strategy that if the bank is going to be bought, why not have this done by a French company?