BayernLB offices raided as authorities probe the terms of its Hypo Group deal

City A.M. Reporter
AN p

AN prosecutors raided BayernLB and its Austrian unit Hypo Group Alpe Adria yesterday over suspicions the German bank overpaid when it bought Hypo in 2007.<br /><br />The raids are part of a probe into whether former BayernLB chief executive Werner Schmidt was in breach of trust when he chose to pay &euro;1.625bn (&pound;1.52bn) for just over 50 per cent of Hypo, prosecutors said in a statement.<br /><br />BayernLB said it was cooperating with the authorities. <br /><br />Prosecutors and police searched for evidence in bank branches and other, undisclosed locations in Munich, southern Austria, and Luxembourg, the prosecutors said.<br /><br />BayernLB bought Hypo from the southern Austrian state of Carinthia, then governed by the late right-wing populist Joerg Haider, and from private investors who had injected fresh capital into Hypo only a few months before the purchase.<br /><br />The investors&rsquo; capital injection, which concluded in March 2007, implied a valuation for Hypo of &euro;2.75bn.