French bank Societe Generale said on Tuesday its 5.5 billion euro ($8.45 billion) rights issue was oversubscribed, providing a base for its battle to recover from a trading scandal.
Investors applied for 1.84 times the number of shares on offer, the company said.
SocGen carried out the share issue to bolster its finances after unveiling in January 4.9 billion euros of trading losses which it blamed on rogue deals by a single trader. The scandal has made it vulnerable to a takeover bid.
The one-for-four rights issue at 47.50 euros a share was fully underwritten by JP Morgan and Morgan Stanley.
SocGen shares were up 4.5 percent, outperforming a 3.4 percent rise in the DJ Stoxx European bank sector. At that price, SocGen has a stock market value of around 30 billion euros.
"It's good for the bank. The short-term problem of its capital has been solved," said Stratege Finance fund manager Valerie Cazaban, who bought rights issue shares.
BNP Paribas Bid Remains in Frame
Many investors had bought the SocGen rights issue shares due to bid speculation surrounding SocGen. France's biggest listed bank BNP Paribas has said it is looking at SocGen. BNP Paribas narrowly failed to buy SocGen in 1999.
BNP Paribas shares were up 1 percent, giving it a market capitalization of around 51 billion euros.
SocGen's executive chairman Daniel Bouton has repeatedly said he plans to continue running SocGen as an independent entity.
"The success of this operation will allow Societe Generale to continue its development in business and regions with high potential," SocGen said in a statement.
However, analysts and fund managers said the bank's successful execution of the rights issue would not necessarily provide a barrier to any takeover attempt.
"It doesn't really change the big picture in terms of M&A (merger and acquisition) speculation," said an analyst at a U.S. investment bank who declined to be named.
Stratege Finance's Cazaban said a bid on SocGen could happen in the near future.
"If there's a deal, it ought to take place in the forthcoming days. Otherwise, the stock will lose its speculative value," she said.
SocGen shares have fallen by around 30 percent since the start of 2008.