By Marcel Michelson and Blaise Robinson
Shares in France's second-biggest listed bank jumped as much as 7.8 percent after a U.S. investment bank published a note saying British bank HSBC had enough cash to launch a bid, prising SocGen away from potential domestic predators.
HSBC declined to comment on the report which adds to a list of takeover scenarios that have been swarming around the French bank since it announced 4.9 billion euros of trading losses from unauthorized positions, which it blames on a single trader.
Its board is due to meet later on Wednesday and could launch the share rights issue then, a source close to the bank said.
HSBC has emerged already as one of several potential European suitors if foreign bids are welcome, but analysts and banking sources said it was far from the most obvious contender.
"They are also keener to go into emerging markets and I am not sure they would be comfortable with SocGen's risk profile in investment banking."
Historic rival BNP Paribas, France's largest listed bank ahead of SocGen, has said it is looking at SocGen.
SocGen shares were up 5.7 percent at 83.72 euros at mid-session, rising against the backdrop of fragile European markets which saw bank stocks unchanged on average.
It is worth 39 billion euros at current prices, but some analysts say a break-up could unlock another 20 billion.
"We might see someone coming in and blocking the capital increase with a takeover offer, that's the rumor today," said a Paris-based trader with a foreign brokerage.
CAPITAL INCREASE
SocGen's rights issue, which will be underwritten by JPMorgan and Morgan Stanley, is designed to shore up the bank's key Tier 1 risked-weighted capital solvency ratio to 8.0 percent, from 6.6 percent.
A possible obstacle to a quick capital hike is uncertainty over the bank's financial performance ahead of February 21 results.
AMF chief Michel Prada told Reuters the regulator would study SocGen's capital increase plans closely in coming days.
