Paribas

"It takes all the diplomacy of the great banker, and the magic of the served Lafite Rothschild castle, to forget the stock market battle taking place between the bosses of BNP, Paribas, and Société Générale, all around the table."

"This document has one merit: it shows that it was Henry Racamier who went to fetch Bernard Arnault. And it gives the latter legitimacy to at least set foot in LVMH, without prejudice to the betrayals and counter-betrayals of others later on. "From the start, I was deceived," Bernard Arnault would later assert. The principles are set: execution will take the form of a friendly takeover bid for 30% of LVMH's capital, as allowed by law at that time. The shares will be purchased by Financière Agache at a price of 3,000 francs and brought to a joint company owned equally by the two allies. The day of the assault is set for Monday, June 27. This takeover bid was concocted by André Battestini of Paribas, who advises Racamier. Lazard is not in on the deal. This crime of high treason (and self-interest) will have serious consequences."

"Instigators of the merger, Paribas and Lazard will not be forgotten. The former will receive a commission of 15 million, the latter 12.5 million. The feasting is complete."

"Nevertheless, André Battestini decides, against everyone's advice, to engage Paribas in the venture. He wonders if he has embarked on a strange adventure... but he perseveres and in October 1981, a consortium that will remain the same for years is finally ready: Penhoët, a portfolio company close to Paribas, takes 10%, Fidic of Serge Desmarais, a former oilman, and Pascal Gruzon (a subsidiary of Elf Aquitaine) share the remaining 10%. Louis Vuitton has taken the first step towards a future IPO. Always"

"Then Paribas announced in a full-page advertisement published in Switzerland’s major newspapers that it was growing and, as part of its growth plan, was seeking shares of Paribas (Suisse) valued at about sf400 each. The share acquisition was to be a swap: five Pargesa bearer shares worth sf5,000 for 11 Paribas (Suisse) shares valued at sf4,400, a 12-percent premium. Pargesa then offered holders of convertible bonds issued by the Paribas (Suisse) subsidiary Paribas Suisse (Bahamas) Ltd. —1 con¬ vertible to shares of Paribas (Suisse) — to trade them for Pargesa shares. The board of Paribas (Suisse), of which Moussa was a member (as were de Pfyffer and Gerard Eskenazi, co-president and director- general of Paribas, France), recommended that shareholders accept the offer. No one in the French government acted, because no one knew that during the negotiations before the introduction of the nationalization bill Moussa had allowed Paribas (Suisse) and Cobepa to buy control of each other. As far as the government was concerned, all was progressing normally; in fact, Paribas, France no longer owned control of Paribas (Suisse). Both offers expired on 26 October 1981, but by 22 October, a majority of the 40 percent of Paribas (Suisse) shares held by Warburg (20 percent) and Cobepa (20 percent) were offered to Pargesa; as well, the public shareholders had responded eagerly, tendering enough shares and bonds to ensure that Pargesa had Paribas (Suisse) in the bag. The next day, Pargesa was listed on the Geneva Bourse, and prices immediately rose to sf1,035. On 30 October, de Pfyffer an¬ nounced that 924,000 Paribas (Suisse) shares had been tendered to Pargesa for Pargesa shares. Pargesa had to increase its capitalization to sf700 million/us$346.5 million and increase its bearer share issues by 420,000 more shares to meet its obligations (as well as increase the sfIOO share issue proportionally), but had acquired 52.3 percent, absolute control of Paribas (Suisse) sa, even before converting the bonds for shares."

"Paribas owned a share of Volvo Sweden; Volvo Sweden owned a piece of Paribas. Paribas owned a share of Groupe Frere Bourgeois of Belgium; Groupe Frere Bourgeois owned a share of Paribas. The same held true with Power Corporation of Canada, S. G. Warburg (u.s. merchant bankers), and the British Becker Group (stock under¬ writing, financiers, general securities dealers), the last two of whom had joined Paribas in an international merchant banking venture, W arburg-Paribas-B ecker."