Ping An to Vote Against Fortis-BNP Paribas Deal

Chinese insurer Ping An Insurance, the largest shareholder of Fortis, plans to vote against selling the stricken group's assets to BNP Paribas, casting fresh doubt on the deal.

AP

Fortis shareholders will vote at meetings in Belgium on Tuesday and the Netherlands on Wednesday on revised terms for BNP Paribas's purchase of a majority of Fortis Bank, the former Belgian banking business of Fortis now in state hands.

Ping An, with a Fortis stake of just under 5 percent, was among shareholders that voted against previous terms of the deal and said in a statement on Sunday that it would do so again.

The world's second-biggest insurer by market value and part-owned by HSBC Holdings took a combined 22.8 billion yuan ($3.33 billion) impairment loss on its Fortis stake last year.

"We believe that the dismantlement of Fortis, which was not approved by shareholders, violates corporate governance procedures and destroys shareholder value," Ping An said.

"Other credible and viable solutions exist and should be considered, in the interest of all parties. Such solutions could maximize the benefits to Fortis' clients, employees and the society in which it operates," it added.

Probable Approval

Fortis Chief Executive Karel De Boeck has said he believes the deal will probably be approved this week.

"The larger turnout -- some 20-25 percent -- will probably lead to a small shift to 'yes'," De Boeck said in an interview published on Saturday in Belgian business daily De Tijd.

The chances of a vote in favor increased after a Brussels court ruled earlier this month that all shareholders be allowed to vote, rather than just those holding shares at the time of Fortis's break-up in October.

The more recent investors would be eyeing a possible profit, in contrast to the huge losses incurred by the longer-term shareholders.

If the deal is approved, BNP would buy 75 percent of Fortis Bank, the Belgian banking business of Fortis that is now in state hands, and indirectly take 25 percent of Fortis Insurance Belgium from Fortis.

The deal, revised three times, would make BNP the euro zone's biggest deposit holder.

Investors opposed to the deal, such as those represented by Belgian lawyer Mischael Modrikamen and investor activist group Deminor, argue that Belgium should return Fortis Bank in exchange for a stake in Fortis.

Fortis has said this is not realistic and Belgian Prime Minister Herman Van Rompuy said last week that there was no chance of further negotiations with either BNP or Fortis.

If Fortis shareholders voted 'no', Fortis Bank would remain in state hands, he said.

Fortis, stretched by its 24 billion euro ($37.37 billion) purchase of the Dutch business of ABN AMRO, was carved up in October after an 11.2 billion euro cash injection failed to calm investors.

Fortis shares, previously seen as a must-have stock for prudent Belgians, are now little more than a penny stock.

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