Citigroup rumours boost Societe Generale shares

PARIS, March 13, 2006 (AFP) – Shares in French bank Société Générale shot up three percent on Monday in response to reports it could be a takeover target for Citigroup of the United States and amid speculation on consolidation elsewhere in the sector.

After gaining 4.8 percent on Friday, Société Générale was up three percent at EUR 121.78 in mid-day deals on an overall market that had risen 0.50 percent.

“In the banking sector everything is moving right now,” said one trader.

Société Générale has yet to comment on reports that it could be acquired by Citigroup, the largest bank in the United States.

On Friday, a Citigroup spokesman had dismissed takeover talk as market speculation.

French banks Banque Populaire and Caisse d’Epargne have said that they are holding talks that could lead to the merger of some of their activities, adding that the negotiations should continue until June 1 at the latest.

Analysts at brokerage CM-CIC said a tie-up between Banque Populaire and Caisse d’Epargne could lead to merger and acquisition moves elsewhere.

“This operation, after that of BNP Paribas on BNL of Italy increases the pressure on other players, such as Société Générale, which has not made major acquisitions” and finds itself isolated, they said in a note to clients.

Analysts at Exane BNP Paribas added Monday: “Threats of mergers and acquisitions are increasing.”

Subject: French news