Welle, Deutsche

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Yale University EliScholar – A Digital Platform for Scholarly Publishing at Yale YPFS Documents (Series 1) Browse by Media Type 4-24-2009 German government to take control of Hypo Real Estate Deutsche Welle Follow this and additional works at: https://elischolar.library.yale.edu/ypfs-documents Recommended Citation Welle, Deutsche, "German government to take control of Hypo Real Estate" (2009). YPFS Documents (Series 1). 11068. https://elischolar.library.yale.edu/ypfs-documents/11068 This Document is brought to you for free and open access by the Browse by Media Type at EliScholar – A Digital Platform for Scholarly Publishing at Yale. It has been accepted for inclusion in YPFS Documents (Series 1) by an authorized administrator of EliScholar – A Digital Platform for Scholarly Publishing at Yale. For more information, please contact elischolar@yale.edu. 6/23/2021 German government to take control of Hypo Real Estate | Business| Economy and finance news from a German perspective | DW | 24.04.2009https://www.dw.com/en/german-government-to-take-control-of-hypo-real-estate/a-4204982 1/2There are real fears HRE could go the way of LehmanBrothersHRE shareholders were advised toaccept the takeover bidBUSINESSGerman government to take control of Hypo Real EstateThe German government has told Hypo Real Estate (HRE), the biggest German casualty of the world financial crash, that itwill obtain a 90-percent controlling stake in the bank by way of an equity issue.HRE disclosed the move in a board statement from its head office in Munich on Friday.Berlin would ask the shareholders at a meeting on June 2 to vote for an increase in equity from just under700 million euros ($925 million) at present to 6.3 billion euros, with the German state pumping in all thenew funds.The equity issue would sharply dilute the stakes of the existing shareholders, leaving them with less thana 10th of voting stock.The new equity would be held by SoFFin, the government agency charged with helping German banks viaguarantees and equity infusions.SoFFin disclosed earlier in Frankfurt that a government takeover offer for HRE of 1.39 euros per share had made little progress.Merck Finck analyst Konrad Becker told news agency AFP the weak response by investors so far was not surpising, because "people often waituntil the very last day before deciding to sell in hopes the purchaser will raise the offer."Only 1.28 percent of shares had been acquired as of Thursday afternoon, SoFFin said. That brought Berlin's present stake to 9.94 percent.The move could come at his expense of US investor JC Flowers, who heads a consortium owning almost 24 percent of shares in HRE. So far,he has been dismissive towards the bid."Accept bid"But the HRE supervisory and executive boards advised shareholders Friday to accept thetakeover bid for their shares. That offer expires on May 4. HRE stock rose 1.4 percent instock-market trading Friday to 1.41 euros.Last month, Germany legislated compulsory purchase powers in case the shareholders didnot accept the bid.Chancellor Angela Merkel's government is concerned that a collapse of HRE could lead tothe sort of financial market chaos that followed the failure of US investment bank LehmanBrothers in September last year.HRE's problems arose at its Depfa Bank unit, which operated from largely deregulatedDublin. Depfa is a principal lender to German local government, raising bond issues for roads and new buildings.The government has so far given the bank support worth 102 billion euros.TOP STORIES / BUSINESS6/23/2021 German government to take control of Hypo Real Estate | Business| Economy and finance news from a German perspective | DW | 24.04.2009https://www.dw.com/en/german-government-to-take-control-of-hypo-real-estate/a-4204982 2/2Germany's banking industry is currently weighed down with significant problems. It has more than 800 billion euros worth of so-called toxicassets on lenders' books.DW RECOMMENDSGerman lawmakers to investigate Hypo Real Estate debacleGerman lawmakers are launching a fact-finding commission over the near-bankruptcy of crisis-hit Hypo Real Estate bank. (23.04.2009)  German Stabilization Fund makes offer for HRE sharesThe German government's Financial Market Stabilization Fund has announced its offer for all shares in the Hypo Real Estate bank. If shareholders do notsell shares voluntarily, the government can force them to do so. (17.04.2009)  German president clears way for bank nationalizationGerman President Horst Koehler has signed a controversial bill into law allowing the government to take full control of troubled mortgage lender HypoReal Estate, if necessary. (07.04.2009)  

German government to take control of Hypo Real Estate

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German government to take control of Hypo Real Estate

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