Postbank sale talks close to collapse
Active talks between Deutsche Post and potential buyers of its majority stake in Germany’s biggest retail lender Deutsche Postbank have stalled, casting doubt on wider banking consolidation.
Several sources familiar with the situation told Reuters that no buyer was in sight for Deutsche Post’s stake of 50 percent plus one share, sending the shares to a three-year low.
Another source familiar with the matter said Deutsche Bank, the last remaining potential bidder involved in intensive talks, is no longer interested at this time.
“There are no longer any talks with Deutsche Bank. The price expectations were too far apart,” the source said, adding the price would have to fall dramatically for Deutsche to return to the negotiating table.
“The process has broken down, but is not dead yet,” another person familiar with the matter said.
Postbank shares, having earlier hit a low of 39.73 euros, were trading down 6.4 percent at 40.01 euros by 1543 GMT, lagging a 4.3 percent drop in the DJ Stoxx index of European banks.
Postbank, which has nearly 15 million customers, was seen as the biggest prize of a long hoped-for consolidation in the German banking sector, in which German insurer Allianz is also seeking a partner for its embattled Dresdner Bank.
Consolidation looked to be moving forward this year when France’s Credit Mutuel bought Citigroup’s German retail operations.
But analysts say differences of views on sale prices and the valuation of assets and risks on lenders’ books in face of financial market uncertainties may keep sellers and buyers from reaching agreement.
LONG PAUSE
Merck Finck analyst Konrad Becker said news of the breakdown in talks over Postbank, which prompted the lender’s share to fall more than 7 percent to a three-year low, meant the sale was probably off the table for this year.
“There could be similar problems in the merger talks between Commerzbank and Dresdner Bank. I wouldn’t be surprised if it didn’t work out there, either,” Becker said.
Dresdner made writedowns from the financial crisis of more than $1 billion in the second quarter, taking the tally to almost $5 billion, with Allianz’s management warning that more could follow.
However, Landsbanki Kepler analyst Dirk Becker warned against drawing too firm a parallel between the Postbank sale, where Deutsche Post is aiming to extract a premium for its majority stake, and Allianz’s efforts to find a merger partner for Dresdner, which Becker described as a “rescue deal”.
“Once the crisis has passed, Postbank will again be up for sale,” Becker said, adding this might take one to two years.
Reuters reported last month that British bank Lloyds TSB was also dropping out of the running for Postbank, which has a market capitalization of 7 billion euros (USD 10.28 billion), down from more than 10 billion just two months ago.
