German state-controlled bank WestLB is in exclusive talks with private equity firm Apollo Global Management over a sale of its real estate unit, Reuters reported Wednesday. Earlier reported had valued the unit, WestImmo, at about 400 million euros ($567.9 million).
(Reuters) – State-controlled German bank WestLB is in exclusive talks with Apollo Global Management on the sale of its real estate subsidiary, WestLB said on Wednesday.
Earlier this month, two sources familiar with the situation had told Reuters private equity firm Apollo was in talks to buy the real estate lending unit WestImmo for about 400 million euros ($567.9 million).
At the time, one of the sources said negotiations were continuing about who would take on possible liabilities in the aftermath of a potential sale.
Apollo, which made its stock market debut in March, is a rival of Blackstone Group LP and KKR .
Private equity firms have recently benefited from an improving economy and rising stock market valuations and have seen the value of their portfolios increase. They have also taken advantage of a rebound in M&A and stronger IPO markets to exit some of their investments.
The European Commission is due to decide soon whether to approve a state bail-out for ailing WestLB, but a condition for the approval is that the bank must find new owners by the end of 2011 and sell WestImmo as early as the end of this year.
On Monday, EU Competition Commissioner Joaquin Almunia said the European Commission was close to finalising a restructuring of WestLB in discussions with German authorities.
Almunia has said he hoped for a formal decision on approving the restructuring plan by September or October. (Reporting by Josie Cox; Editing by David Holmes) ($1=.7043 Euro)