7 In'tl Fin. L. Rev. 21 (1988)
An Italian Raid on an Old Belgian Lady

handle is hein.journals/intfinr7 and id is 263 raw text is: An Italian raid on an
old Belgian lady

De Benedetti's attempt to take over Soci6t6 G6n6rale de Belgique caused
a national outcry Sonja Boelaert and Nicola Bonucci plot the course
of the battle

Brussels, April 14, nine am - in front of 30 Rue
Royale, hundreds of people are waiting to get in. The
address is Soci6t6 G6n6rale de Belgique (SGB) head-
quarters. At the back of the building a big tent has
been installed to accommodate over 1,000 SGB
shareholders. The atmosphere is comparable to a pre-
miere at Covent Garden. The shareholders meeting of
April 14 is the happening of the year; a number of
small investors who had sold their SGB shares kept
just one in order to be present.
After four months the last act (at least for the
moment) of the most dramatic financial operation in
Europe is to be played and, as in fairy tales, the black
knight is defeated by the white knight. In fact when,
on January 17,1988 Carlo de Benedetti announced his
tentative takeover of SGB many financial operators
seemed surprised. Yet if the challenge was extremely
ambitious there are objective reasons explaining de
Benedetti's OPA (offre publique d'achat or takeover
On one side is a monument of European capitalism
la vieille dame, as SGB is respectfully named in Bel-
gium, set up in 1822 by King William I of The Nether-
lands when Belgium was still part of the Dutch domin-
ions. From then onwards the history of SGB was
closely connected with the history of Belgium. Nowa-
days, SGB, which has sometimes been called 'Bel-
gium's alternative government', represents more
than a third of the country's economy It controls
directly or indirectly 1261 companies located in 67
countries. The book value of the Belgian holding rep-
resents (at June 30, 1987) Bfr100.65bn.
However this giant had weaknesses; in the last
quarter century SGB has been characterised by its sta-
tic attitude, and itslackof decisionmaking. Thehiring
of Viscount Davignon from the EC a few years ago was
intended to introduce some fresh air. Furthermore, its
shareholdings were extremely diluted and offered a
wonderful opportunity for a takeover.
These are probably some of the considerations that
prompted de Benedetti to launch his OPA. If SGB is
the expression of 19th century capitalism, de
Benedetti appears to represent a new category of
moneymakers. The Chairman of Olivetti has built up
a small empire,with a financial and industrial holding
company which lastyear achieved company revenues
of US$11bn on the industrial side and US$3bn from a
range of financial interests. The company employs
more than 100,000 people and has interests in such
diverse sectors as banking, publishing, metals, fash-
ion and insurance. Before the bid for SGB, de
Benedetti took control of Buitoni (which he has since
sold), Valeo, the French car component group, and the
German Triumph-Adler office equipment group.

Due to its prestigious character SGB would cer-
tainly have been the jewel in the crown. However,
while the battle has now been joined for four months,
the final outcome is still uncertain. But the result of the
April 14 shareholders' meeting means that de Bene-
detti failed to gain full and undisputed control of SGB.
Why is this? It seems that il condottiere underesti-
mated a certain number of crucial points. Anyone try-
ing to raid a European company should bear in mind
the nationalistic reaction; the media aspect; and the
absence of any clear rules of the game.
Any bidder announcing an unfriendly takeover
should be prepared for a strong reaction. DeBenedetti
went further. He clearly intended to clean up the old
establishment at SGB, hence the outraged reaction of
Ren6 Lamy, governor of SGB. In addition, de
Benedetti and his staff did not seem to realise that, as
the Wall Street Journal noted, in the eyes of many Bel-
gians 'a takeover of [SGB] would be no less than a coup
d'dtat'. This explains the first exasperated reaction of
Marc Eyskens, the Finance Minister. Lamy, who
accused de Benedetti of being an imperialiste and col-
onisateur, was also supported by a large section of the
press or rather the French speaking press.
De Benedetti was surprised by the strength of
anti-Italianism in Belgian public opinion. At a
press conference in January, he conceded that the
nationalistic sentiment against his entry into SGB
was understandable, but'less justified in acountry
like Belgium which is the seat of the Community'.
However, de Benedetti could not ignore the

International Financial Law Review June 1988

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