By John Rega and Fred Pals
Dec. 13 (Bloomberg) -- Belgium’s government will push to proceed with the sale of Fortis assets to BNP Paribas SA even after the country’s appeals court froze the deal because it didn’t have shareholder approval.
The Brussels Court of Appeals ruled yesterday that the 14.5 billion-euro ($19 billion) asset sale must be put to investors for a vote before Feb. 12. The court also appointed a panel to write a report on terms of the deal and threatened Belgium with a 5 billion-euro fine if it sells Fortis before the shareholder vote.
“Advisers are now examining what is possible and what is not possible,” Peter Poulussen, the Brussels-based spokesman for Prime Minister Yves Leterme, said today in a telephone interview. No action has been taken, and the Belgian government will decide its next steps at a Dec. 15 meeting, he said.
Fortis, Belgium’s biggest financial-services firm, was forced to sell most of its assets for 27 billion euros between Oct. 3 and Oct. 6 after bailout funds from three countries failed to shore up confidence. The company, part of the group that paid 72 billion euros last year for Amsterdam-based ABN Amro Holding NV, ran out of short-term funding amid the global credit crisis.
The sale to Paris-based BNP Paribas “constitutes the best guarantee,” Leterme’s office said today in an e-mailed statement. The top priority is protecting bank workers and clients, it said.
Le Soir newspaper said on its Web site today that Belgium expects to appeal. A Belgian prosecutor will report Monday on whether the the government followed proper procedures, Justice Minister Jo Vandeurzen said today in a statement.
‘Best Deal’
“It is logical the Belgian government will maintain that this is the best deal, said Niels Lemmers, lawyer of the Dutch shareholder group VEB, in a telephone interview. ‘‘But the experts will now get their chance to look at the value of the transactions.’’
The court decision complicates BNP Paribas’s plan to complete the purchase quickly and preserve Fortis’s customer base. BNP Paribas agreed Oct. 5 to buy 75 percent of Fortis Bank and take over Fortis Insurance Belgium NV.
The court also ordered BNP Paribas to continue providing funding to Fortis Bank to prevent a collapse before the shareholder vote. BNP Paribas said yesterday in a statement that it will seek to close the purchase and the ruling doesn’t call the transaction into question.
Fortis will study the decision before it responds, Kathleen Steel, a company spokeswoman in Brussels, said by telephone. ‘‘It is highly probable” that the company will postpone a shareholder meeting scheduled for Dec. 19. “We were surprised like a lot of people were surprised,” Steel said of the outcome of the ruling.
‘Major Victory’
The court’s decision was “a major victory for shareholders that have been deprived of their most essential rights,” said Mischael Modrikamen, the lawyer representing about 2,000 Fortis investors who appealed a Nov. 18 Brussels commercial court ruling.
The ruling won’t affect the Dutch government’s purchase of Fortis assets for 16.8 billion euros on Oct. 3, the Finance Ministry said. “The ruling says explicitly the transaction has been concluded and can’t be frozen,” Lies Weitenberg, a spokeswoman of the Finance Ministry, said in phone interview today. “The Dutch state remains the owner and the bank’s clients have no reason to worry,” she added.
The Netherlands took full control of the Dutch units of Fortis and ABN Amro after deciding the initial rescue didn’t go far enough. Dutch Finance Minister Wouter Bos announced last month the Netherlands will combine Dutch assets of ABN Amro and Fortis Bank and may sell or list it in 2011.
Lemmers, the attorney for the VEB shareholder group, said there’s little chance the Dutch side of the transaction can be reversed. “All of the shares have been tendered in the Netherlands, while in Belgium the transaction hasn’t been closed.”
To contact the reporters on this story: John Rega in Brussels at jrega@bloomberg.net. Fred Pals in Amsterdam at fpals@bloomberg.net
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