France's Credit and Investment Institutions Committee late Tuesday night authorized BNP's revised twin bids, but the committee reiterated that it would re-examine the situation if BNP failed to gain control of one or both of its targets to determine whether BNP can retain a minority stake. The committee's decision lifts the last major obstacle to letting the markets determine the outcome. France's Financial Markets Council is due to announce Thursday.

The battle has raged since March when BNP, seeking to thwart an agreed-upon merger between Societe Generale and Paribas that was unveiled in January, launched unsolicited double-barreled takeover bids for both banks valued at $37 billion. The combination would create the world's largest bank in assets, but SocieteGenerale and Paribas, maintaining that a three-way hostile marriage is unmanageable, have fiercely resisted.

Societe Generale sweetened its offer in June by adding a cash payout of as much as 1.5 billion euros ($1.54 billion) to its initial all-stock offer to Paribas shareholders, under which it is offering five Societe Generale shares for eight Paribas shares. Alternatively, Societe Generale offeredtwo of its shares for three Paribas shares, to a limit of 30 per cent of Paribas's shares. The sweetened bid, valued at about 20 billion euros, was approved last week by the Credit and Investment Institutions Committee.

BNP responded last week by raising the value of its two bids to about 41 billion euros, adding a cash payout of as much as 890 million euros to Societe Generale holders to its initial offer of 15 BNP shares for seven Societe Generale shares.

Societe Generale and Paribas have convened board meetings for Thursday to respond, but the heads of both banks have already been critical. This led BNPWednesday to issue a communique rebutting what it called "gratuitous, contradictory or fallacious statements" by its targets, which BNP Managing Director Baudouin Prot called "shareholder-unfriendly.

The Wall Street Journal