German Deutsche Post More Valuable in Pieces – Reports
German postal services group Deutsche Post AG will be more valuable if broken up and sold in pieces, according to estimates of a number of prominent investment banks.
Financial investors might take over the group in one piece and make a profit from the sale of its separate units, German weekly WirtschaftsWoche reported on July 17, 2006.
The estimates of leading U.S. investment banks have showed that Deutsche Post’s mail dispatch unit and the express and logistics unit could be sold for 15 bln euro (18.98 bln USD) and 10 bln euro (12.65 bln USD), respectively. Another 8.0 bln euro (10.12 bln USD) could be made from the sale of the 67 pct stake in banking unit Deutsche Postbank AG.
Including tax savings from losses carried forward, net debts, and pension schemes, the combined value of all the parts of the group is estimated at 37.5 bln euro (47.45 bln USD), while Deutsche Post’s current market capitalisation stands at 25 bln euro (31.63 bln USD).
In case of a full acquisition, financial investors will have to pay a premium of between 20 pct and 25 pct due to the size of the group which will increase the purchase price to 31 bln euro (39.22 bln USD). According to investment banks, a consortium of private equity and hedge funds might come up with such a sum. WirtschaftsWoche cites a top investment banker who says that a consortium of four or five investors might make an offer in the next two or three months.
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Source: Die Welt
