Flotation of German Postbank increasingly unlikely to be a success

The planned flotation of Postbank, the banking subsidiary of Deutsche Post, the German postal service, seems increasingly likely to be cancelled. Although some of the banks involved in the transaction continue to say that they are confident that the flotation will be a success, others believe that the flotation will not be able to take place unless Deutsche Post is prepared to lower the price range for shares in the bank. This has been set at 31.50 to 36.50 euros per share, which many investors insist is too high.

Another possibility is thought to be that Deutsche Post could lower the volume of shares that it is planning to issue; at present, the company is aiming to float 49.9 per cent of shares in its subsidiary on the stock market. However, Deutsche Post says that it intends to remain within the specified price range and that it is not prepared to issue fewer shares. Deutsche Post claims that it is not under any financial pressure and that the failure of its plans for the flotation would not have any effect on its strategy of expansion.