Paribas shares rose 3.2% in morning trading to 118.00 euros, after they were suspended on Tuesday following Societe Generale (SocGen) improving its offer for the bank by 1.5 billion euros.

In February SocGen offered five of its shares for eight Paribas shares when first proposed the merger.

But then BNP entered the fray with a rival offer aimed at bringing all three banks together, a proposal that SocGen and Paribas have since been fighting hard.

Merger could result in Europe's second largest bank

SocGen shares slumped on Wednesday morning , down 1.34% to 183.50 euros, while BNP shares saw little change, down 0.30% to 83.75.

The BNP board was holding a regular meeting on Wednesday, but was not expected to make any immediate decision on a possible counter-offer, particularly as a Paris court is due to rule on Thursday on whether the stock market authorities were right to rule its bid legal.

The new SocGen offer must be approved by the Financial Markets Council (CMF) which has until 22 June to make its ruling. It then needs approval from the COB stock market watchdog and the Credit Institutions Committee (CECEI), both of which could rule a few days after the CMF.

SocGen's new bid for Paribas remains at five of its shares for eight Paribas, but adds a 75 euro cash offer for every eight Paribas shares.

It is also proposing a second formula of two SG shares for three Paribas.

The new offer values Paribas shares at around 125 euros, analysts said, almost six per cent above Wednesday's noon price.

If it goes ahead, the new group will overtake Credit Agricole to become the largest banking group in France, and the world's fourth largest, with profits last year of 2.1bn euros ($2.4bn, £1.4bn).