BNP talk lifts SocGen as France warns predators

By Andrew Hurst and Mathieu Robbins

PARIS/LONDON (Reuters) - France warned foreign banks on Tuesday not to try to grab control of Societe Generale, as speculation of a takeover approach by rival BNP Paribas drove its shares more than 10 percent higher.

"The government is determined that Societe Generale remains a great French bank," Prime Minister Francois Fillon told parliament. "The government will not let Societe Generale be the object of hostile raids by other companies," he said earlier.

SocGen shares ended the day up 10.4 percent at 78.45 euros (58.25 pounds), spurred on by persistent rumours that France's biggest listed bank, BNP Paribas, might launch a bid following the rogue trading scandal which has engulfed SocGen.

BNP, which made a failed bid for SocGen in 1999, declined to comment on the market talk but a person familiar with the matter said it had not ruled out bidding for its rival.

The source said internal discussions at BNP were at a preliminary stage, and any move is unlikely to be imminent.

Analysts, however, were sceptical that a bid for SocGen was imminent because the bank had not been mortally wounded.

"SocGen has taken a hit, but it does not need to be more than a flesh wound," said Simon Maughan at MF Global.

SocGen said on January 24 it had uncovered massive unauthorised stock trading by one of its employees that led to 4.9 billion euros (3.64 billion pounds) of losses, the world's biggest rogue trading scandal.