French banking authorities will meet Monday to examine BNP's $37 billion unsolicited takeover bids for Societe Generale and Paribas amid indications that the government is pushing for a negotiated solution to the battle. BNP's bid, launched earlier this month, aims to foil an agreed $17.2 billion merger that Societe Generale and Paribas are still trying to complete.

For the second time since the struggle began, the government on Thursday issued a statement calling for the parties to "choose the solution that best serves the financial sector, the interests of industry, employment as well as the national interest."

Reluctant to Talk The statement is widely considered to be a new effort to push Societe Generale and Paribas -- which have rejected BNP's move as unfriendly and "unmanageable" -- to talk toBNP. But Paribas's chief executive officer, Andre Levy-Lang, ruled that out on Thursday. Asked on the sidelines of an analysts' meeting in London whether he would be prepared to sit down with BNP Chairman Michel Pebereau, Levy-Lang replied: "No way. Not unless he withdraws his bids -- if he does that, maybe we can talk about doing a joint venture in Ghana or something." Levy-Lang added that there is little the government can do to push its views on the bid because it involves publicly traded companies. "France is a normal country in which boards make their own decisions," he said. "We are listed companies with no government shareholdings."

A government official echoed Mr. Levy-Lang's comments, saying: "We can only watch what is happening. But we are attentive to labor issues." Both BNP and SG Paribas, as the merged bank is to be called, have pledged to avoid mass layoffs in France.

Levy-Lang and Societe Generale Chairman Daniel Bouton were in London on Thursday to try to persuade investors that theirplanned merger is a better deal for shareholders than BNP's project, which Mr. Levy-Lang dismissed as "a dream" and "an intellectual construction."

Their London visit came a day after the two executives revised upward estimates for savings and profits that would occur under SG Paribas. They said SG Paribas would boast net earnings of 3.4 billion euros ($3.7 billion) in 2001, up from 2.1 billion euros in 1998. The 2001 figure is 150 million euros above the banks' initial estimates. Synergies would be much lower if BNP was involved, say Bouton and Levy-Lang. Markets Are Skeptical Financial markets continued to react with skepticism on Thursday. Paribas shares rose 30 European cents to 101.80 euros in Paris trading, while Societe Generale shares fell 60 cents to 170.40 euros. BNP shares, meanwhile, rose 70 cents to 77.50 euros.

Levy-Lang and Bouton said an alliance with BNP wouldn't produce the sort of savings a similar merger would create in the U.S. because of the diffculty of reducing staff in France. Themarkets "aren't thinking things through," Levy-Lang said.

But some analysts, such as Catherine Woods of J.P. Morgan, argue that the newly discovered synergies at SG Paribas are working to BNP's advantage by suggesting the three-way deal would create even more value than initially announced.

"This counteroffensive does appear to play into BNP's hands, as it highlights the increased potential for value creation in these two banks before adding on BNP's overlap, both in domestic and international banking," Woods said in a research note.