The Belgian management of Belgian-French bank Dexia is opposed to a potentially blockbuster merger with Italian peer Sanpaolo, Belgian newspaper De Standaard said on Saturday.
The opposition was coupled with sharp criticism of Dexia Chief Executive Pierre Richard and follows scepticism from a large Dexia shareholder and analysts about the benefits of a tie-up, which would form Europe's ninth-largest bank with a market capitalisation of 37 billion euros ($48.19 billion).
The banks have said they are in "preliminary contact". The head of Dexia's local credit unit, Daniel Caille, said on Friday a merger was possible, as was a more specialised alliance. Dexia, the world's leading lender to local governments, has been seen as a takeover target due to its relatively small size.
Italian newspaper Milano Finanza meanwhile said French state-owned financial group Caisse des Depots had asked Sanpaolo CEO Alfonso Iozzo to intervene as a "white knight" to fend off a hostile bid for Dexia from bigger French banks such as Societe Generale or BNP Paribas.
Caisse des Depots owns nearly 8 percent of Dexia and 1.7 percent of Sanpaolo. It was not immediately available to comment on Saturday and has declined to comment in the past.
Societe Generale's stock fell on Friday on rumours it would launch a counter-bid for Dexia. Societe Generale on Friday denied its board was meeting and declined to comment on Dexia.
The De Standaard newspaper also reported criticism of Dexia's Richard.
"Maybe he'd better leave. He dragged his board into disastrous projects in the Netherlands and now he's proposing this senseless Italian project without touching base with his shareholders," one person involved was quoted as saying.
Dexia's Brussels office declined to comment and its Paris office had no immediate comment.
Turin-based Sanpaolo, Italy's third-largest bank, also declined to comment but said its executive committee was scheduled to meet on Monday.
The agenda of the long-scheduled meeting was not known.
The swirling rumours come days after top Spanish bank Santander Central Hispano, also a core Sanpaolo stockholder, completed a takeover of Britain's Abbey National in a deal that reignited the current round of trans-European banking merger speculation.
De Standaard newspaper said not only are Dexia's main Belgian shareholders - mutually owned insurance firm Ethias, Arcofin and a consortium of Belgian local authorities - opposed to the Sanpaolo deal, but so is the Belgian management around Axel Miller, chairman of Dexia Bank Belgium's management board.
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