MUNICH (Reuters) – U.S. investor JC Flowers has called on Berlin to return to the negotiating table after talks failed to resolve how the German government can take control of Hypo Real Estate, a bank that Flowers partly owns.
JC Flowers has proven to be one of the biggest obstacles to government plans to nationalize stricken Hypo Real Estate.
The investor, which controls almost one quarter of the bank, is reluctant to surrender its stake at the stock market price.
German newspaper Frankfurter Allgemeine Zeitung said Flowers wanted slightly more than 3 euros a share for its stake.
Hypo Real Estate shares closed up 0.6 percent at 1.64 euros.
On Thursday, a spokesman for Flowers said although the government had rejected its proposals, it was still prepared for further talks and was open to solutions.
Earlier this week, Germany approved a draft law allowing forced nationalizations and said it would use the new powers to take control of lender Hypo.
It is the latest example of state intervention in the banking sector as countries across the globe abandon free-market principles and move to shore up institutions seen as crucial to the functioning of their broader economies.
The new German legislation, which was backed by Chancellor Angela Merkel’s cabinet on Wednesday but must still be approved by parliament, breaks a post-war taboo in giving Berlin the right to expropriate, or dispossess, shareholders in domestic banks.
It puts pressure on Flowers to sell its stake voluntarily.
(Reporting by Peter Maushagen; Editing by Andrew Macdonald)
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