The planned sale of the Wiesbaden real estate financier failed at the first attempt. The chances for two financial investors look better on the second try.
(Photo: PR)
Advent and Centerbridge cannot be accused of a lack of determination. Only two months after the failure of their takeover bid, the two financial investors dare a new attempt to buy the Wiesbaden real estate financier Aareal.
The chances are better this time: the quarrelsome Aareal major shareholders, who had successfully sabotaged the takeover at the time, are now signaling that they will accept the new, more lucrative offer.
This means that another German bank is likely to be taken over by private equity investors. If the deal goes through, Aareal would be in good company: the US investment company Cerberus, together with JC Flowers, played a leading role in the takeover of the ailing HSH Nordbank, which now operates under the name Hamburg Commercial Bank. Lone Star has taken over IKB, which achieved dubious fame during the financial crisis, and a consortium around Apollo has taken over the Oldenburgische Landesbank.
Although Germany is considered a notoriously difficult banking market, the calculus of Anglo-Saxon investors is understandable. Tough austerity programs and a sharply defined business model ensure the necessary efficiency.
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Added to this is the hope of a turnaround in interest rates, which is now also imminent in Europe and should increase bank profitability, at least in the medium term. So there is upside potential – at least in theory.
The practice looks more complicated. In contrast to other European countries, no financial investor has managed to make a profitable exit in Germany.
IKB has now been part of the Lone Star portfolio for 13 years. But times were better before.
For 2020, the bank gave its owner a lavish dividend. Then came the Ukraine war and with it the decision that Lone Star would go empty handed for 2021.
The OLB is working on an IPO, and the owners of Hamburg Commercial are exploring a sale. But here, too, the economic consequences of the Russian attack on the smaller neighbor threaten to ruin all plans.
A turn for the better for the German banks has often been invoked, and just as often it has failed to materialize. Cerberus in particular has already felt the difference between rational calculation and unpredictable reality.
In 2017, the Americans got into Commerzbank and Deutsche Bank with high hopes, but they are now withdrawing and realizing losses. This history does not have to repeat itself, but German banks remain a risky investment.
More: Financial investors are working on the third offer for Aareal Bank – 37 percent of the voting rights have already been secured