Deutsche Post share sell-off oversubscribed

30th November 2004, Comments 0 comments

30 November 2004, FRANKFURT - A sell off of shares in German mail carrier Deutsche Post was oversubscribed with institutional investors and underwriters scooping up all EUR 1.15 billion worth of the stock by Tuesday morning. The federal government bank KfW said in Frankfurt that after the main sale raised EUR one billion on Monday, the two underwriting banks, Deutsche Bank and Morgan Stanley, had exercised their greenshoe option on Tuesday to purchase more shares worth EUR 150 million. A greenshoe option i

30 November 2004

FRANKFURT - A sell off of shares in German mail carrier Deutsche Post was oversubscribed with institutional investors and underwriters scooping up all EUR 1.15 billion worth of the stock by Tuesday morning.

The federal government bank KfW said in Frankfurt that after the main sale raised EUR one billion on Monday, the two underwriting banks, Deutsche Bank and Morgan Stanley, had exercised their greenshoe option on Tuesday to purchase more shares worth EUR 150 million.

A greenshoe option is when underwriters extend a successful issue by buying additional shares to sell at a profit. The two banks had until the end of December to exercise the option but did not wait.

The sale cuts the overall government stake in Post, which owns the DHL parcels business and courier operations in several countries, to 56 percent, with the rest traded on the German stock exchanges.

KfW said the buyers paid EUR 15.79 per share, the price at the close of electronic trading in Frankfurt on Monday.

Individual investors were excluded from the fast-track sale. In Tuesday trading, the stock gained 0.8 percent and was changing hands at EUR 15.91 by mid-afternoon. KfW said it received more than twice as many bids as stock was available.

German government policy is to ultimately dispose entirely of the former post office assets that now operate as Deutsche Post and the telephone company Deutsche Telekom.

To raise money short-term, the federal government has transferred much of Post to KfW, which is left owning 36.9 percent of the giant transport group after the latest sale. KfW's assets and debts do not figure in federal government accounts.

Berlin, which currently owns 20 percent of Deutsche Post directly, may be tempted to transfer more of its stake to KfW to reduce net government debt. KfW, originally a reconstruction fund, specializes in discount home loans and development aid finance abroad.

KfW is reluctant to hold more than 50 percent of either Deutsche Post or Telekom, since it would then be obliged under German accounting rules to include them in its consolidated accounts.

The stock market has brightened over the past two weeks, with the main DAX index at a two-year intraday high on Monday.

DPA

Subject: German news 

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