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

City A.M. Reporter
GERMAN 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.