German government may buy 70% in Hypo
Germany is considering buying a 70% stake in Hypo Real Estate Holding AG and may nationalize the lender after the government twice tried to bail it out.
By Bloomberg |
BERLIN/FRANKFURT: Germany is considering buying a 70% stake in Hypo Real Estate Holding AG and may nationalize the lender after the government twice tried to bail it out, three people familiar with the situation said. Shares gained the most in two months in Frankfurt trading.
The plan being considered by the Finance Ministry to give the government a controlling share would dilute investors��� holdings, including the 25% stake owned by US-based investor JC Flowers Co, said the people who declined to be named because the talks are private. Hypo Real foundered in October after its Dublin-based Depfa Bank Plc unit was unable to borrow amid the seizing up of credit markets. It has since received 92 billion euros ($121 billion) in debt guarantees and credit lines.
Finance Minister Peer Steinbrueck has said saving Hypo Real is necessary to maintain the stability of Germany���s mortgage-bond market.
���If Hypo���s new capital requirements are as much as 10 billion euros, which seems reasonable, buying stock of this value at current prices would create a government stake of at least 70%,��� Dirk Becker, an analyst at Kepler Capital Markets in Frankfurt, said in an interview. Becker said the government may even get up to 80% of Hypo Real if it pumps 10 billion euros.
The plan being considered by the Finance Ministry to give the government a controlling share would dilute investors��� holdings, including the 25% stake owned by US-based investor JC Flowers Co, said the people who declined to be named because the talks are private. Hypo Real foundered in October after its Dublin-based Depfa Bank Plc unit was unable to borrow amid the seizing up of credit markets. It has since received 92 billion euros ($121 billion) in debt guarantees and credit lines.
Finance Minister Peer Steinbrueck has said saving Hypo Real is necessary to maintain the stability of Germany���s mortgage-bond market.
���If Hypo���s new capital requirements are as much as 10 billion euros, which seems reasonable, buying stock of this value at current prices would create a government stake of at least 70%,��� Dirk Becker, an analyst at Kepler Capital Markets in Frankfurt, said in an interview. Becker said the government may even get up to 80% of Hypo Real if it pumps 10 billion euros.
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