Buyout groups bid for public finance specialist Depfa, say sources – Reuters

(Reuters) – Public finance specialist Depfa, which state-rescued German bank Hypo Real Estate has put on the block, has attracted binding offers from several private equity groups and hedge funds, several people familiar with the transaction said.

A consortium of hedge funds including Third Point, which approached Hypo Real Estate over Depfa in February 2012, is among the final bidders, one of the people said.

Separately, a consortium of hedge fund Och-Ziff (OZM.N: Quote, Profile, Research, Stock Buzz) and Blackstone (BX.N: Quote, Profile, Research, Stock Buzz) bid, as did J.C. Flowers and Apollo (APO.N: Quote, Profile, Research, Stock Buzz), three other people familiar with the transaction said.

Former UBS Chief Executive Oswald Gruebel with backing from a sovereign wealth fund has also handed in a bid, two of them added.
The offers value Depfa at 200-300 million euros ($271.27-406.91 million), the sources said, adding Hypo Real Estate is planning for a final round of bids in several weeks.

“We are currently evaluating the offers but presently cannot comment on the number of bidders and the bids,” a spokesman for Hypo Real Estate said.

The bidders declined to comment, except for Och-Ziff and Blackstone, which were not immediately available for comment.

Hypo Real Estate has to sell Depfa by the end of 2014 and its Deutsche Pfandbriefbank NUEG.UL arm by 2015 as a condition of the European Commission’s approval of its state bailout.

Germany nationalised the stricken real estate lender, which collapsed in the aftermath of the Lehman Bros bankruptcy. Hypo Real Estate received a 10 billion euro capital injection in the wake of the financial crisis as well as 145 billion euros in liquidity guarantees.

Sector bankers have said in the past that Hypo Real estate could end up winding down Depfa itself, as that may prove easier than a sale to a private equity investor, which would have to shoulder relatively high refinancing costs as they usually do not have cheap access to bond markets.

 

 

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