The Board examined the industrial plan for merger and development submitted by the recently appointed Executive Committee of BNP Paribas. The project was considered to be in the interest of Paribas, its shareholders, its clients and its employees and therefore approved.
Furthermore the Board studied BNP's simplified public exchange offer for the full amount of Paribas shares not yet in its possession. It examined the intentions of the initiator and the terms of the offer (29 BNP shares in exchange for 20 Paribas shares), identical to BNP's last offer, without the contingency right certificates (CVG).
This offer responds to the Board's request that Paribas shareholders should be offered satisfactory terms in order to be able to exchange their Paribas shares as soon as possible for the more liquid BNP shares, before the merger proposed by BNP which will only occur in several months.
The Board studied the intrinsic value of the offer, applying the usual valuation criteria for a public exchange offer with no cash component. Specifically, the proposed offer represents a 5% premium for the Paribas shareholder in relation to the average closing price for the 20 trading sessions prior to the meeting, and a 35% premium in relation to the 20 trading sessions prior to 29th January 1999 when the first public exchange offer on the capital of Paribas was announced.
From this particular standpoint the Board considered the offer to be acceptable.
Furthermore the Board compared the offer with the previous offer made by BNP. The terms of the proposed offer represent a 5% premium in relation to the offer made on 9th March 1999 (11 BNP shares in exchange for 8 Paribas shares) and a 4% discount in relation to the improved offer made 1st July 1999 (29 BNP shares and 13 CVG in exchange for 20 Paribas shares), using the average closing prices for the CVG's since they were listed. The Board considered this situation as acceptable in view of the circumstances.
The Board took particular note of the intentions expressed by the initiator. It also compared the terms of the proposed offer with the likely terms of the BNP-Paribas merger, as defined by the usual valuation criteria applied by the merger auditors. The Board concluded that the terms of the merger will in all likelihood be less than those of the offer.
The Board therefore gave a favourable opinion on the proposed public exchange offer with the unanimous approval of those present and those represented by proxy, and recommended that Paribas and its shareholders tender their stock under the terms of the offer which is deemed to be in their interest.