Banque National de Paris (BNP) was poised to scoop the Hong Kong and China equity arm of Peregrine Investments Holdings last night, after Canadian Imperial Bank of Commerce (CIBC) walked away from a deal to buy the bankrupt firm's entire equity operation late on Saturday. BNP seems likely to buy the flagship Hong Kong and China equity operation, led by Peregrine managing director Francis Leung, in a transaction that would irrevocably break up Hong Kong's once proud investment bank. Senior executives from Peregrine's international operations will make a last ditch effort to find a buyer for the regional equity operations with another European commercial bank said to be still at the table. The price agreed by BNP is not known, but senior managers at Peregrine's Hong Kong and China team are said to have lobbied for a deal with the French bank. Until Friday, Madrid-based Banco Santander was a front runner to buy the entire business, guaranteeing more than 500 jobs. Yet, by Saturday evening, a deal with CIBC was said to have been agreed, but the announcement of merger talks between Royal Bank of Canada and the Bank of Montreal was cited by the Canadian bidder as the reason for its sudden withdrawal, Peregrine executives said. CIBC did not make a formal offer, but a workable transaction was thought to have been agreed upon by late Saturday afternoon. 'The Peregrine jinx would seem to continue,' one Peregrine equity executive said of the CIBC pullout. The provisional liquidator, David Hague of Price Waterhouse, has been criticised for not appointing an independent investment bank rather than Peregrine directors to negotiate with potential buyers. 'Objective and independent advice has not been available to the liquidator,' one Peregrine executive said. A third party would have conducted a wider search for a buyer and prevented conflicts of interest among Peregrine directors during the negotiating process, he added. By yesterday afternoon, (Hong Kong time) senior BNP executives in Paris were said to be claiming a deal had been concluded for Peregrine's most sought-after equity franchise. Mr Hague could not be contacted. The true prize for BNP is 'rain-maker' Mr Leung, who is seen as having the vital mainland relationships to secure lucrative underwriting mandates for red-chip and H-share equity offerings, according to Peregrine executives. At Tuesday's post-collapse press conference, Mr Leung said his top priority was securing employees' jobs and continuing the business of raising capital for mainland firms. BNP has a limited presence in the local equity market through its 70 per cent owned subsidiary, BNP Primeeast, whose brokerage and private banking business is concentrated in Southeast Asia. Banco Santander emerged as a surprise contender. It has built up a significant research and trading team in Latin American emerging markets. Should BNP employ the entire Hong Kong and China team, about 170 Peregrine employees from the securities and corporate finance divisions should retain their jobs. The fate of those employed in regional offices depends on a buyer being found. Peregrine executives concede the chances of finding a white knight for the rump of the regional equity business are fading, as the informal deadline of this weekend, set by the provisional liquidator, is passed.