French bank Societe Generale said its 5.5 billion euro ($8.45 billion) rights issue was oversubscribed, providing a base for its battle to recover from a trading scandal that has made it a take-over target. Investors applied for 1.84 times the number of shares on offer, the company said on Tuesday.
SocGen carried out the share issue to bolster its finances after unveiling in January 4.9 billion euros of trading losses which it blamed on rogue deals by a single trader. The scandal has made it vulnerable to a take-over bid. The one-for-four rights issue at 47.50 euros a share was fully underwritten by J.P. Morgan and Morgan Stanley.
"It's good for the bank. The short-term problem of its capital has been solved," said Stratege Finance fund manager Valerie Cazaban, who bought rights issue shares. Many investors had bought the SocGen rights issue shares due to bid speculation surrounding SocGen. France's biggest listed bank BNP Paribas has said it is looking at SocGen. BNP Paribas narrowly failed to buy SocGen in 1999.