BNP seen evaluating whether to bid for SocGen

By Mathieu Robbins

LONDON (Reuters) - French bank BNP Paribas has not ruled out bidding for Societe Generale, its domestic rival hit by a rogue trading scandal, a person familiar with the matter said on Tuesday.

The Paris-based bank would be attracted to buying SocGen by the domestic growth in retail banking, the person said. On the other hand, BNP and SocGen's investment banks have a lot of overlap, and BNP is less enthused about that side of a tie-up, the source added.

BNP declined to comment.

SocGen stock rose over 10 percent on Tuesday to 78.45 euros, bouncing back from a recent sharp decline, on renewed market talk that BNP could launch a bid. BNP shares rose 2.9 percent.

Traders said they had heard talk that BNP could launch a 92 euros a share bid.

Internal discussions at BNP are at a preliminary stage, and any move is unlikely to be imminent, said the source, adding BNP was extremely unlikely to pounce without at least informal French government approval.

The bank could also wait and see how successful a planned SocGen rights issue is before deciding whether to pursue a bid.

Fund managers gave a lukewarm response to SocGen Chairman Daniel Bouton in London on Monday as he aimed to sell the planned 5.5 billion euro (4.5 billion pound) capital increase in a tough market.