Depfa board advises shareholders to accept the offer
Hypo Real Estate has launched a takeover bid for Germany’s Depfa bank, in potentially one of Germany’s largest financial services deals since Allianz bought Dresdner Bank in 2001.
HRE is offering Depfa shareholders €6.80 per share in cash and 0.189 new shares for every Depfa share held, valuing Depfa at €5.6bn. The bid reflects a 17% premium to Depfa’s 20 July closing price and 11.2 times the underlying earnings figure of €507m for the year to 31 December 2006.
Depfa chief executive Gerhard Bruckermann said the merger would provide access to new customers for both businesses, as well as opportunities for expansion.
The company, which has been advised by Goldman Sachs, said the deal was in the best interests of its shareholders and urged them to vote for the deal.
“The strategic fit of the deal is compelling,” said HRE chief executive Georg Funke. “As a result of this combination, we will raise our expanding public finance and infrastructure financing activities to the level of a leading global player.”
Jones Lang LaSalle director of corporate finance Barry Osilaja said: “Hypo is a big real estate bank anyway. The acquisition would give the bank even greater leverage in real estate debt markets across Europe. Hypo is about to have all sorts of instruments to use in taking on more diverse real estate risk. This deal would increase the bank’s liquidity and boost its already strong power across the continent.”
Depfa has headquarters in Dublin and is listed on the Frankfurt stock exchange. Set up in 1922 as a German State mortgage bank, it was privatised and floated in the early 1990s.
