Deutsche Post may seek USD 18.6 Billion for Postbank
Deutsche Post AG may seek about 12 billion euros (USD 18.6 billion) in its sale of Deutsche Postbank AG, Germany’s biggest consumer bank by clients, three people with knowledge of the transaction said.
Deutsche Post may aim for 70 euros a share for Postbank, 17 percent more than yesterday’s closing price, the people said. Postbank is drawing interest from German financial-services companies Allianz SE, Commerzbank AG and Deutsche Bank AG as well as Spain’s Banco Santander SA, said the people who declined to be identified because the matter is confidential.
Postbank, with more than 14.5 million customers and 850 branches, will give potential buyers an opportunity to grab a bigger share of Germany’s USD 1.6 trillion consumer-lending market, which is dominated by state-owned lenders and savings banks. Shares of the Bonn-based bank have risen 40 percent in the seven months since Deutsche Post, Europe’s biggest postal service, said it’s considering a sale of the unit.
Postbank has almost 5 million more retail customers than its second closest rival Deutsche Bank, according to a report by Sal. Oppenheim. The lender posted a pretax return on equity of 19.3 percent last year ahead of Commerzbank’s 18.7 percent and Dresdner Bank’s 8.5 percent, it said.
Postbank extended gains and rose 4 percent to 62.10 euros in Frankfurt electronic trading, valuing the company at 10.2 billion euros.
Deutsche Post AG may seek about 12 billion euros (USD 18.6 billion) in its sale of Deutsche Postbank AG, Germany’s biggest consumer bank by clients, three people with knowledge of the transaction said.
Deutsche Post may aim for 70 euros a share for Postbank, 17 percent more than yesterday’s closing price, the people said. Postbank is drawing interest from German financial-services companies Allianz SE, Commerzbank AG and Deutsche Bank AG as well as Spain’s Banco Santander SA, said the people who declined to be identified because the matter is confidential.
Postbank, with more than 14.5 million customers and 850 branches, will give potential buyers an opportunity to grab a bigger share of Germany’s USD 1.6 trillion consumer-lending market, which is dominated by state-owned lenders and savings banks. Shares of the Bonn-based bank have risen 40 percent in the seven months since Deutsche Post, Europe’s biggest postal service, said it’s considering a sale of the unit.
Postbank has almost 5 million more retail customers than its second closest rival Deutsche Bank, according to a report by Sal. Oppenheim. The lender posted a pretax return on equity of 19.3 percent last year ahead of Commerzbank’s 18.7 percent and Dresdner Bank’s 8.5 percent, it said.
Postbank extended gains and rose 4 percent to 62.10 euros in Frankfurt electronic trading, valuing the company at 10.2 billion euros.
The Postbank sale coincides with the planned disposal of Citigroup Inc.’s German consumer unit. Citigroup, reeling from record losses on subprime-infected assets, set a June 4 deadline for the first round of offers, two people with knowledge of the situation said yesterday.
Citibank Privatkunden AG, the market leader for consumer loans in Germany with 340 branches and about 3.2 million clients, may be sold for as much as 5 billion euros, analysts estimate.
Fragmented Market
The sale of Postbank and Citibank would shake up the German banking industry, which is more fragmented than in France and Britain. Germany’s five biggest private banks together hold a 12 percent share of the nation’s consumer lending market, according to Bundesbank data.
Deutsche Post, the majority owner of Postbank, is accepting indications of interest from potential buyers, people familiar with the sale said. The postal operator is trying to limit losses at its unprofitable DHL Express unit in the U.S. by shrinking the network, firing workers and transferring some deliveries to the United Parcel Service Inc.
“Deutsche Post simply doesn’t need banking,” said Christian Obst a Munich-based analyst at UniCredit SpA. “Management has its hands full with the operating business of DHL and mail. They did a good job with Postbank and can now reap the benefits from a sale.”
Postbank would fetch at least 70 euros a share in an auction, said Olaf Kayser, an analyst at Landesbank Baden- Wuerttemberg in Stuttgart.
Kayser estimates the “fair value” of Postbank’s stock is about 61 euros, based on a model that takes into account estimates for profit, long-term return on equity and the cost of equity. Any buyer will have to pay a premium of at least 20 percent because of a bidding competition and prospects for cost cuts and additional revenues, which would lift the price per share to about 75 euros, he said.
“Domestic buyers will have to pay for the synergies and foreign bidders will drive up the price,” Kayser said.
