New Deutsche Bank Investor Cerberus Doubles Down on German Lenders
November 15 2017 - 2:58PM
Dow Jones News
By Jenny Strasburg
U.S. private-equity firm Cerberus Capital Management LP on
Wednesday disclosed a 3% stake in Deutsche Bank AG, deepening its
bets on European banks and the German economy.
The investment, worth roughly EUR978 million ($1.2 billion) at
Wednesday's closing share price, made Cerberus the bank's No. 4
shareholder. The roster is led by a Chinese conglomerate, members
of the Qatari royal family and U.S. asset manager BlackRock
Inc.
This summer, Cerberus disclosed a roughly 5% stake in Germany's
No. 2 lender, Commerzbank AG. Cerberus manages more than $30
billion in assets.
The firm said Wednesday in a statement that Germany is a "highly
attractive place to invest." It cited "attractive long-term
opportunities in retail and corporate banking due to Germany's
robust economy, high savings rate, and a number of other
factors."
"We welcome every investor who believes in the value potential
of the Deutsche Bank share," Deutsche Bank said in a statement.
Deutsche Bank shares rose on the news, climbing 1.9% for the
day, to EUR15.76. The shares are up 2.4% this year, after a brutal
2016 hampered by questions about strategy, unsettled legal battles
and the bank's capital position.
Earlier this year Deutsche Bank raised $8.5 billion in a share
sale and refreshed its strategy, which now includes a multiyear
process of combining its big German retail-banking operations.
There was no indication Wednesday that Cerberus has communicated
with Deutsche Bank beyond formally notifying the bank of its share
position, a person briefed on the communications said.
Still, Cerberus's recent arrival to Germany to amass a roughly
$2 billion combined stake in its two biggest lenders will fuel
speculation that the banks could talk about a potential merger --
if not now, then down the road -- analysts and investors said. Some
said Cerberus can be patient, citing its 2006 purchase of Austrian
retail bank Bawag PSK for about EUR3.2 billion.
Bawag raised EUR1.9 billion last month in Austria's biggest-ever
initial public offering, which valued the company at EUR4.7
billion. Cerberus retains a significant stake.
Commerzbank, with advisers, has been evaluating its strategic
options, people close to the bank say. After a 2008 bailout,
Commerzbank remains around 15% government owned, and has long been
the subject of merger speculation. Its executives have declined to
comment on the speculation or on discussions with shareholders. A
spokeswoman declined to comment Wednesday. The bank's shares rose
1.8% Wednesday, to EUR11.87.
Bankers say financial executives in general have warmed to the
idea of potential big European bank mergers, both domestic and
cross-border. Some bankers and finance executives say combining all
or big portions of Deutsche Bank and Commerzbank would be too
messy, unwieldy or politically unacceptable, though others say such
a move can't be ruled out. Speculation about cross-border mergers,
with German banks or otherwise, also has focused on French and
Italian banks.
Executives of Commerzbank and Deutsche Bank held preliminary
talks in August 2016 about a potential tie-up, but concluded it
wasn't viable, The Wall Street Journal and others reported at the
time, citing people familiar with the matter. Since then Deutsche
Bank said it would integrate its big Postbank retail-banking
business in Germany, after earlier planning to shed it.
Write to Jenny Strasburg at jenny.strasburg@wsj.com
(END) Dow Jones Newswires
November 15, 2017 14:43 ET (19:43 GMT)
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