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UPDATE 3-All Fortis investors to vote on BNP, court rules

Published 04/10/2009, 11:51 AM
Updated 04/10/2009, 12:08 PM
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* Ruling reverses last week's Modrikamen win

* Chances of BNP Paribas deal boosted by court ruling

(Adds Fortis reaction)

By Philip Blenkinsop and Mark John

BRUSSELS, April 10 (Reuters) - A Belgian court ruled on Friday that all Fortis investors were eligible to vote on its break-up, boosting French bank BNP Paribas' chances of buying Fortis assets.

The Brussels appeals court also ordered that Fortis did not have to give shareholders a vote at its April 28-29 meetings on an alternative "stand-alone" plan, under which it would regain much of its banking activities.

Friday's ruling overturned last week's legal victory for Mischael Modrikamen, a lawyer representing some 2,400 Fortis shareholders. He had ensured only investors holding shares when the group was broken up in October could vote on the carve-up.

"It's clearly a defeat for us," Modrikamen said, adding he was now pessimistic about the chances of resisting plans to sell Fortis Bank to BNP Paribas.

"You will have a whole series of opportunistic Anglo-Saxon funds who will back it because they will be making a small profit. They have a lot of incentive to vote 'yes'," Modrikamen said.

Fortis welcomed the ruling, saying it provided legal certainty for shareholders. It also meant it would not have to revise the agenda for its meetings at the end of the month.

Last week's annulled ruling would have reduced the chance of the BNP Paribas deal being accepted, as it excluded those shareholders who bought shares since October 14.

Those shareholders would be eyeing a potential profit from their investments rather than a huge loss.

Fortis lawyer Francoise Lefevre said the court backed the substance of his arguments on both counts.

Fortis was carved up by the Dutch, Belgian and Luxembourg governments in October after an 11.2 billion euros ($14.87 billion) cash injection failed to stop its shares tumbling.

French bank BNP Paribas is now poised to buy 75 percent of Fortis Bank in Belgium, which was once the banking arm of listed Fortis Holding but is now in state hands.

It would also acquire a 25 percent stake in Fortis Insurance Belgium from Fortis Holding for 1.375 billion euros.

Fortis, the Belgian state and BNP Paribas revised the terms of the breakup for a third time after Fortis shareholders rejected the deal in February.

The revisions, which would allow Fortis Holding to continue as an insurance company and lower its exposure to toxic assets, are set to be put to a shareholder vote at the end of April.

The shareholders blocked the previous terms of this deal in February.

Fortis shares, which had previously been regarded as a "safe" investment, are now little more than a penny stock. ($1=.7530 euros) (Reporting by Philip Blenkinsop and Mark John; Editing by Mike Nesbit and Jon Loades-Carter)

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