DEUTSCHE Bank revealed details of its planned €9.8bn (£8.1bn) money-raising scheme yesterday, which will pay for the purchase of retail bank Deutsche Postbank and bolster its own capital position before the introduction of the Basel III rules.
The €9.8bn share issue, Europe’s largest this year, is more than the €7bn to €9bn estimate by analysts on Friday, when shares in Deutsche Bank fell 4.6 per cent in European trading in response to news of a share sale.
“With this capital increase we are strengthening the bank’s equity capital in light of expected regulatory changes. The takeover offer to the shareholders of Postbank allows us to minimise the total costs of the acquisition,” said chief executive Josef Ackermann.
Deutsche Bank will have to write down its existing 29.95 per cent stake in Postbank to complete the takeover this year, and will take a charge of about €2.4bn in the third quarter, it said in a statement yesterday.
The bank will bid between €24 and €25 for the 30 per cent of Deutsche Post Bank held by minority shareholders. It will also use an agreement with previous owner Deutsche Post to buy up its remaining stake.
The Frankfurt-based Deutsche Bank expects to issue 308.6m common shares at about €31.80 a share – a discount of 33 per cent on Friday’s closing price – adding an extra 33 per cent to its market capitalisation.