German Postbank IPO may be scrapped if price fails to meet expectations
Deutsche Post World Net AG’s upcoming initial public offering (IPO) of 49.9 pct of its Postbank unit may be scrapped if the price per share it gets fails to meet CEO Klaus Zumwinkel’s expectations, Handelsblatt reported, citing Deutsche Post supervisory board sources.
The paper cites investment bankers involved in the deal as saying that the ‘pain threshold’ for Zumwinkel is around 29.70 eur per share, equating roughly to the value of Postbank on Deutsche Post’s books.
‘(Deutsche Post) shareholders would not accept a lower price,’ the paper cites one banker as saying.
It is questionable whether investors will be prepared to pay that much, however, the paper said.
It cites fund managers as saying that this level is the absolute maximum that they are prepared to pay.
Boersen-Zeitung cites fund managers as calling for a significant discount to the book value — significantly less than 30 eur per share — due to Postbank’s low return on equity and the fact that Deutsche Post will remain its majority shareholder after the IPO, which is due to take place on June 21.
