French bank BNP Paribas sought on Saturday to save its troubled takeover of choice Belgian assets from Fortis with a new carve-up to appease the stricken financial group's angry shareholders.
But BNP Paribas decided not to walk away from the deal only after securing guarantees from the Belgian government to cover some of the losses in case the acquisition sours.
The Belgian government and the French banking group had given themselves until midnight on Friday to revise the deal after minority shareholders' in the Fortis Holding company rejected an earlier agreement.
However, the new deal does not end the uncertainty over Fortis' fate with a lawyer who has represented minority shareholders saying that it offered no reason for them to approve it.
"Compared to the previous deal, there's absolutely nothing favourable for the shareholders," lawyer Mischael Modrikamen told Belgian public radio RTBF.
"I absolutely don't see at this point any objective reason whatsoever to call on shareholders to vote yes to this new deal."
After marathon talks, the Belgian government announced in the early hours of Saturday morning that a new deal had been reached, although it too will have to win the approval of Fortis Holding's shareholders.
"For us, this agreement is profitable to savers, shareholders, workers and the state," the Belga news agency quoted Prime Minister Herman Van Rompuy as saying.
Under the new deal, BNP would still buy 75 percent of Fortis Bank, the Belgian banking business of the group, from the Belgian state, which would retain a 25 percent interest.
However, the French bank would buy 25 percent of Fortis' Belgian insurance operations from the holding company instead of only 10 percent as foreseen under the earlier agreement.
If Fortis Bank continues to have difficulties, BNP secured a guarantee from the Belgian government to cover up to 1.5 billion euros in losses and infuse the Belgian bank with up to two billion euros.
Fortis Holding would also be stuck with less exposure to toxic assets while the state offered guarantees against further losses at Fortis Bank and BNP made commitments to keep jobs.
BNP Paribas chief executive Baudouin Prot acknowledged that "a certain number of adjustments will be necessary," although there was "not significant overstaffing" and any reduced headcount would come from voluntary departures.
The Belgian-Dutch financial services group was broken up last October as the global financial crisis undermined investor confidence. The Dutch state took over its Dutch assets and Belgium the Belgian banking assets.
The dismantling of Fortis stripped the publicly traded holding company of its main assets, prompting shareholders to launch court action as their shares became next to worthless.
In December, a Brussels appeal court backed their legal challenge, ruling that the minority shareholders should have been consulted first, and appointing a panel to review the operation.
Last month, Fortis shareholders rejected by a slim majority the sale to BNP Paribas as well as the nationalisation of its assets in the Netherlands.
Fortis tribulation have been the source of considerable drama in Belgium, indirectly bringing down the last government following accusations that high-level officials sought to influence the court ruling.