French Bank Poised to Buy Trust Giant TCW.

Downtown-based Trust Company of the West, one of nation's largest privately held fund managers, has agreed to sell a 70 percent stake to French banking giant Societe Generale SA in a deal worth more than $1.2 billion.

Societe Generale is offering 14.1 million shares, or 3.3 percent of its capital, for 51 percent of TCW Corp. Inc., one of the few large asset management firms in the United States to remain unlisted.

The French company will increase its stake by 19 percent between 2003 and 2006, adding 4.75 percent a year for an eventual 70 percent ownership of TCW. Societe Generale intends to buy back half of the initial stock outlay to limit the number of new shares its must issue, thereby making the deal effectively 50 percent in cash.

TCW was founded in 1971 and currently manages $80 billion in assets. TCW officials said 61 percent of the firm's clients are institutional investors and the remaining 31 percent are retail buyers or wealthy individuals. TCW management will stay in place and will continue to hold 30 percent of the equity.

Societe Generale officials said the TCW acquisition, its second purchase of a major management fund this month, will help the company gain a strong foothold in the key U.S. market and boost its exposure to equity markets.