The financial investor Cerberus is parting with parts of its stake in Commerzbank and Deutsche Bank.
(Photo: dpa)
Frankfurt This bet went wrong: The US financial investor Cerberus has apparently given up hope of rapid share price increases at Commerzbank and Deutsche Bank: Because Cerberus is selling a considerable part of its stake in the two German banks, even though the financial investor is making losses.
Cerberus is selling around 21 million shares in Deutsche Bank and 25.3 million shares in Commerzbank, reported the news agencies Bloomberg and Reuters. This corresponds to around a third of Deutsche Bank’s share and around 40 percent of Commerzbank’s commitment. Cerberus bought around 62 million shares in each of the two most important German financial institutions in 2017. Cerberus, Deutsche Bank and Commerzbank did not want to comment on the reports.
With the partial exit, the financial investor accepts losses: The placement could bring the investor around 450 million euros. But when he started, Deutsche Bank papers still cost 15.46 euros and Commerzbank shares cost 10.82 euros, around three euros more than on Monday.
According to bankers, the shares of Deutsche Bank are to be sold at a minimum price of 12.06 euros, the Commerzbank shares for at least 7.46 euros. With the sale, Cerberus would take an estimated loss of up to 156 million euros.
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However, the recent price increases have at least reduced the loss. A person familiar with Cerberus’ considerations said that the financial investor wanted to take part of the price gains of the past few days and months with the purchase of shares. The Commerzbank share has gained more than 15 percent since the beginning of the year alone. “It is logical to reduce the position now and take the price level with you – even if it is below the initial price,” said the insider.
More sales could follow
Since Cerberus values its funds at market prices, losses have already been booked. As a result of the sale, the Cerberus stake in Deutsche Bank drops from three percent to two percent and in Commerzbank from five percent to three percent.
That should not be the last step: According to the commissioned bank Morgan Stanley, Cerberus only sets a period of 45 days during which it does not want to throw any further blocks of shares from either bank on the market, reports Reuters. Holding periods of at least three months are normal.
The sale of the share packages is a portfolio adjustment because minority stakes in banks do not actually fit the Cerberus portfolio, the insider told the Handelsblatt. The financial investor also joined Deutsche Bank and Commerzbank in 2017 because both were rated low. In the meantime, however, Cerberus has also come to realize that, in retrospect, both investments were not a clever move.
Cerberus’ almost simultaneous entry into Deutsche Bank and Commerzbank had repeatedly sparked speculation about mergers. When the two institutes specifically discussed a merger in spring 2019, Cerberus was considered a proponent of a merger, which then did not materialize.
Cerberus’ considerations to buy the federal government’s stake in Commerzbank are now likely to be over. After the block of shares was sold, it was an illusion that Cerberus would take over the state’s 15.6 percent stake in Commerzbank, the insider said.
In the autumn, according to financial circles, Cerberus Germany boss David Knower signaled his willingness in confidential discussions to consider acquiring the state stake in Commerzbank if the new federal government was ready to sell.
The exit of the financial investor is a setback for both banks. After all, the Americans’ entry at the time was seen as a sign of confidence in the price potential of both stocks.
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