Societe Generale announced Monday night that it was changing its agreed offer for Paribas to add a 75 euro ($78.96) payment to Paribas shareholders to exchange eight Paribas shares for five Societe Generale shares. Societe Generale says this offer represented a maximum cash payout of 1.5 billion euros ($1.58 billion) if all Paribas shareholders opted for this offer. Alternatively, Societe Generale offered to exchange three Paribas shares for two Societe Generale shares, up to 30 per cent of Paribas's shares.

Societe Generale said its new principal offer represents an 11.8 per cent premium over Paribas's closing price Monday in Paris, and its secondary offer represents a 10.3 per cent premium over Paribas's closing price. To further woo Paribas shareholders, Societe Generale said it would buy back up to 2.5 billion euros in shares inthe newly formed group, to be called SG Paribas.

The new bids mark the latest twist in a bitter takeover battle that has raged since February, when Societe Generale and Paribas announced they planned to merge to create one of the biggest banks in Europe. But days before their merger was to be completed, BNP startled markets by launching unsolicited all-share bids for both banks in a move that would create the world's first $1 trillion bank in terms of assets. BNP offered to exchange seven Societe Generale shares for 15 BNP shares, and eight Paribas shares for 11 BNP shares.

Societe Generale and Paribas deemed BNP's offer hostile and described the three-way merger as impossible. While market reaction oscillated, analysts tended to prefer BNP's bid because it appeared to offer greater cost savings over the long term. While Societe Generale and Paribas said BNP's pledge not to close down branches or lay off staff in France made these cost savings illusory, its raisedoffer reflects an admission that its bid needed something extra to win the favors of the market.

"This is what the market wanted," a Paribas official said. "It wanted cash; that's what it's getting."

BNP had no official comment Monday night on the bids, but a BNP executive said the bank "will evaluate the consequences of the new bid and the market's reaction."

Bankers say trading in Paribas and Societe Generale shares will probably be suspended at least part of the day Tuesday. In Paris trading Monday, Societe Generale shares closed Monday at 196 euros a share, down 1 per cent, while Paribas's shares rose 0.8 per cent to 112.40 euros. BNP shaes closed up 0.2 per cent at 84.50 euros.