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BNP suspends Fortis deal

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BNP suspends Fortis deal


The future of Fortis has become even more uncertain as BNP Paribas said it is suspending a key part of its deal to rescue the stricken financial group. The French Bank is concerned about last week’s court ruling which found the Belgian government had not fully considered the interest of Fortis shareholders in its plan to sell the company. That deal was announced in early October, but now could be bogged down in a lengthy legal battle.

Even before that, investors were uncertain about whether it was a good thing for BNP. Its shares have fallen in value by more than half though its exposure to the Madoff fraud also played a part in that. BNP position has been weakened as this week it revealed 710 million euros of losses at its investment banking unit and said it may cut 700 jobs. Analysts believe there is an increasingly high chance that the Fortis deal will not take place at all. BNP was due to hold a meeting of its shareholders to get approval for the purchase this week but has now cancelled that.

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