Deutsche Bank AG, Germany's biggest bank, may buy just less than 30 per cent of Deutsche Postbank AG for about 2.5 billion euros ($3.5 billion) to bolster its consumer banking business, three people with knowledge of the matter said.
Deutsche Bank would have an option to buy the rest of Deutsche Post AG's stake of 50 percent plus one share in Postbank later, said the people, who declined to be identified because the talks are private. Deutsche Post's supervisory board will weigh the offer, along with a bid for the whole stake from Spain's Banco Santander SA, at a meeting tomorrow, one person said.
Buying less than 30 percent of Postbank would allow Deutsche Bank to thwart other bidders without immediately making an offer for the whole bank. Bonn-based Postbank has more than 14 million customers and 850 branches in Germany, which remains dominated by state-owned lenders. Deutsche Post is seeking to sell Postbank to focus on mail, express deliveries and logistics.
“Deutsche Bank would get its foot in the door without that much of a financing burden,'' said Matthew Clark, a London-based analyst at Keefe, Bruyette & Woods Ltd. who has an ''outperform'' rating on the stock. ''A takeover would shift Deutsche Bank's earnings mix more toward retail, and the financial crisis has shown that diversified businesses fared better.''
Postbank fell 1.25 euros, or 2.7 per cent, to 45.30 euros by 5 p.m. in Frankfurt trading, valuing the lender at 7.6 billion euros. Deutsche Bank fell 4.1 percent to 58.53 euros.
Spokesmen at Frankfurt-based Deutsche Bank, Santander and Deutsche Post declined to comment.
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Commerzbank, Dresdner Deutsche Bank is in advanced talks with Deutsche Post over the potential acquisition of a stake, the companies said late yesterday. Deutsche Bank would keep the two brands and may sell its own products such as DWS mutual funds via Postbank branches, the people said.
Chief Executive Officer Josef Ackermann said yesterday that a purchase of Postbank would strengthen Deutsche Bank's consumer lending unit. The investment would come less than two weeks after Commerzbank AG agreed to buy Allianz SE's Dresdner Bank for 9.8 billioneuros, leapfrogging Deutsche Bank in terms of retail customers and branches.
Santander, with no direct losses from the collapse of the U.S. subprime mortgage market, is taking opportunities to expand its business after agreeing to pay 1.3 billion pounds ($2.3 billion) for UK lender Alliance & Leicester Plc.