The expected rejection of BNP's bids, which would create the world's largest bank in assets, sets the stage for what is likely to be a protracted stock-market battle as both sides try to convince investors that their plan creates more value. Societe Generale and Paribas are likely to harden their resolve to avoid the negotiated outcome to the battle that France's government and central bank have called for, but people involved in the fight don't rule out new developments, including sweetened offers or turning to a foreign white knight to fend off BNP.

In their separate communiques, both SocieteGenerale and Paribas reiterated their contention that BNP's twin bids create uncertainty for shareholders because Paribas and Societe Generale holders would tender their shares to BNP without knowing if it will end up in control of both, only one or neither of its targets.

A BNP spokeswoman said the rejections don't alter their belief that domestic retail banking consolidation is necessary. The spokesperson added, "BNP remains open to dialogue, and if there is none, the markets will decide."

In Paris trading Tuesday, BNP shares lost 1 per cent closing at 79.20 euros ($84.20), while Paribas shares fell 0.48 per cent, closing at 103.40 euros, and Societe Generale shares rose 1.12 per cent, closing at 180.40 euros.