Fortis called on shareholders to endorse a revised bid by BNP Paribas SA for some of its units, saying the sweetened terms cut its exposure to a 10.4 billion- euro ($13.3 billion) pool of toxic assets, Bloomberg reported.
Fortis, once Belgium's largest financial-services firm, said the new terms negotiated Jan. 30 halve its stake in structured credit investments and free it of the obligation to provide debt funding.
The revised deal creates "additional value for the Fortis shareholders," Brussels-based Fortis said in a memo on its Web site late yesterday. "Downward risks have been significantly reduced."
In offering better terms, BNP, France's largest bank, sought to overcome a court challenge to the deal by agreeing to buy a smaller stake in Fortis's Belgian insurance unit and taking on more of its toxic assets. Shareholders vote Feb. 11 on the bid.
Paris-based BNP Paribas still plans to buy a 75 percent stake in the banking unit in an all-stock transaction agreed on in October and now valued at 3.64 billion euros. The Belgian government will keep 25 percent of Fortis Bank NV and get about 121 million BNP shares.
Fortis lost 89 percent of its value in the last 12 months. The shares are slated to resume trading tomorrow after being suspended in Brussels on Jan. 30. BNP Paribas rose 1.7 percent to 30.01 euros in Paris on Jan. 30.
The new terms trim Fortis's shareholders equity to 6.5 billion euros from 7.7 billion euros, while increasing its cash position to 2.4 billion euros from 1.6 billion euros, the statement said.