Deutsche Bank to raise $12.4 bn to buy Postbank, meet Basel norms

Deutsche Bank AG, Germany's largest bank by assets, yesterday said that it plans to raise at least €9.8 billion ($12.4 billion) in a rights issue to buy a majority stake in Deutsche Postbank AG and to boost its capital ahead of the expected new tough regulations on bank capital.

Deutsche Bank, which holds a 29.95-per cent stake in Postbank, the country's largest bank by retail customers, will make a voluntary public takeover of the remaining shares by offering between €24 and €25 per share in cash, valuing the Bonn-based lender at around €5.5 billion.

The offer price is equal to the volume-weighted average share price of Postbank share based on the quotations on the German stock exchanges over the last three months.

To fund the purchase of remaining stock of Postbank, Frankfurt-based Deutsche Bank will issue 308.6 million new registered common shares in public offerings in Germany and the US and thereby increase its share capital by €790.1 million to around €2.38 billion from €1.59 billion, or corresponding to volume of 49.7 per cent of the current share capital.

Deutsche Bank shareholders will be able to buy one new share for every two they now hold and subscription rights will start on 22 September.

The offer is fully underwritten by a group of banks including UBS AG, Banco Santander SA and Bank of America at a preliminary subscription price of €31.80 a share, said Deutsche Bank in a statement.