The hearing was demanded by the two target banks, which claim that BNP's cashless share-swap offer shouldn't have been cleared by the market regulatory body CMF, or Conseil des Marches Financiers. Societe Generale and Paribas, which themselves are trying to merge, argue that BNP's double-barreled bid is confusing to shareholders because there are so many potential outcomes.

"BNP is offering to exchange shares in Societe Generale and Paribas for shares in another bank, but the question is `What bank?'" said Jean-Pierre Martel, a French lawyer who will present the case for the two target banks at the hearing. Mr. Martel said that, given BNP's announced intention to forge a three-way merger with Societe Generale and Paribas, its two bids are de facto dependent on each other, something that isn't allowed under Frenchbourse law.

Defense's Argument BNP's lawyer, Jean-Francois Prat, said that the defense's argument at the hearing will focus on the fact that shareholders in the target banks are being offered quoted shares in BNP, in other words a tangible asset and not merely promises of a putative project.

Having reviewed the case, the French stock-market commission COB, or Commission des Operations de Bourse, will argue Tuesday that the CMF was right to clear the bid on regulatory grounds, people familiar with the COB's position said. The COB argument will stress that BNP's two bids are legally independent of each other and don't in any way block Societe Generale's rival share-swap offer for Paribas.

The fact that the COB will back the CMF is significant because the two bodies have different functions. The CMF is a body made up of market professionals that oversees all financial market regulations. The COB is an independent administration, intended to ensure that investor rights are protected.

WhiteKnight?

Meanwhile, stocks in all three banks rose amid renewed speculation that not all the cards in the complex game have yet been played. Some investors speculate that BNP and Societe Generale still could seek to sweeten their respective bids by introducing a cash element into their offers. Others expect a white knight to appear at Societe Generale's side to help it fend off BNP. This thesis has won more credibility in recent days as Banco Santander Central Hispano of Spain has steadily added to its small stake in Societe Generale. A BSCH spokeswoman in Madrid said that the bank now holds more than 2.5% of Societe Generale's stock, compared with 1.2% about one month earlier, after buying shares on the open market. She added that the bank had bought the shares for "financial seasons" but declined to say how much further the Spanish bank intended to raise its holding.

BNP shares rose to 81.55 euros ($84.98), adding 75 Euroean cents. Societe Generale shares added 1.60 euros to $175.20. And Paribasgained 2 euros to 106 euros.

No ruling is likely on Societe Generale and Paribas's appeal until a week or more after Tuesday's hearing. Mr. Martel, the lawyer for those two banks, noted that the conditions of the hearing weren't favorable to their case, because they would have 75 minutes to argue their case at the beginning of the hearing. After that, BNP would have an equal amount of time to defend its bids, and then the COB, the CMF and a state magistrate also would be able to give their arguments. "That means the defense will have twice as long as we will to put their case," Mr. Martel said, suggesting that the state magistrate will argue in favor of the BNP bids.