Deutsche Post sets subscription price for German Postbank shares

Deutsche Post set the subscription price for new shares in its banking unit Postbank, in a flotation marked by tensions with Deutsche Bank, Germany’s biggest bank.

Deutsche Post, the semi-privatised German postal authority, said it put the price at between 31.50 and 36.50 euros for the June 7-18 subscription period for the initial public offering (IPO).

Deutsche Post is planning to list 50 percent minus one share of Postbank on June 21.

Friction had arisen between the two companies earlier after a leaked internal memo of Deutsche Bank, which along with Morgan Stanley is in charge of handling Postbank’s IPO, revealed that the two sides disagreed over the valuation of the unit.

According to the memo, Deutsche Bank calculated that Postbank shares should be issued at a price of between 26.83 euros and 32.32 euros apiece.

Press reports at the time said that Postbank was hoping the shares will be issued at between 30.50 euros and 36.50 euros.

There is growing concern whether the Postbank flotation will be successful, following the failure of a number of smaller IPOs in recent months.

Deutsche Bank had been asked by the government two weeks ago to make an offer for Postbank, but it declined because it felt the price being demanded by Berlin and Deutsche Post was too high.