Geplaatst op 11 February 2009 door Roland Legrand

Shareholders reject Fortis deals, government scores own goal

We hoped for a yes at the Fortis shareholders meeting but we got a no. The shareholders rejected the sale of the Dutch Fortis activities as well as the revised deal with BNP Paribas after some clumsy maneuvers by the Belgian government.

The defeat of the government and the directors of Fortis Holding was not a complete surprise because a major shareholder, the Chinese insurer Ping An, made it clear it would vote "no", joining ranks with disgruntled individual shareholders.

The surprise came from the Belgian government (acting through Fortis Bank which is now controlled by the government) which possibly ruined the chance to convince a majority of shareholders by trying to obtain voting rights for 125 million shares (4.9%) which were previously labeled "non-voting". The attempt was rather desperate because the legality of the move was very dubious, and it made shareholders literally scream in protest.

Even the directors of Fortis holding, in favor of the deals with the Netherlands and BNP Paribas, opposed the move, which was not voted because the proposal was retracted during the meeting. The clumsy attempt to win the vote probably convinced undecided voters to reject the deals.

Highest turnout ever

About 49,74% of the votes were cast in favor of the deal which enabled the transfer of the Bank to BNP Paribas, so it is quite conceivable that without the last minute intervention of Fortis Bank/the government the deal would have been approved.

About 5,000 shareholders attended the meeting, the highest turnout ever for a Belgian company. Many Fortis employees were disappointed by the results. A takeover by BNP Paribas would not be that dramatic in terms of job losses, especially not if compared with a takeover by another Belgian bank.

"Don't worry"

Prime minister Herman Van Rompuy and deputy prime ministers will meet to discuss the situation. In a brief statement Van Rompuy assured the customers of the Bank that the state guarantees the interests of the customers and the employees of the bank. He explained that the federal state still controls Fortis Bank - even though shareholders voted against the nationalization. Earlier on, Fortis Bank came with a similar message for its clients.

The deals with the Netherlands, France and the Belgian state entity FPIM are not automatically invalid because of today's vote, which creates a complicated legal situation. However, it is quite possible that BNP Paribas will give up (probably claiming compensation). It seems Van Rompuy anticipated on that outcome because he deplored the loss of a great opportunity for the future of Fortis group.

Roland Legrand

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