PE-backed bid for BHF is on the cards

Bankhause Lampe and LGT could end up in a bidding war for Frankfurt-based BHF, which is being sold by Deutsche Bank. Deutsche inherited BHF as part of its 1 billion euro ($1.39 billion) takeover of Sal Oppenheim. According to reports, LGT may join forces with private equity firm Apollo. BHP is expected to go for around $300 million, half of its $650 million value, because of the amount of restructuring needed.

(Reuters) – Bankhaus Lampe and LGT have emerged as favourites to clinch Frankfurt-based BHF as parent Deutsche Bank seeks to sell the unit as a whole, four people familiar with the matter told Reuters.

German wealth manager Lampe and Liechtenstein-based are best positioned to make binding offers for BHF, these people said on Friday.

Lampe is in talks with private equity house KKR about making a joint bid, two people familiar with the matter said.

A spokeswoman for Lampe said: “We continue to evaluate options.”

LGT may join forces with Apollo, another private equity house interested in buying BHF, sources said.

Deutsche Bank in recent weeks narrowed the field of bidders for BHF as it seeks to sell BHF’s wealth management, asset management and corporate banking units as a whole.

BHF’s own management has so far expressed a clear preference for strategic bidders, making it difficult for financial investors to gain a foothold in an industry where hostile deals are not customary.

Deutsche has been on the lookout for a potential buyer ever since it inherited BHF through its 1 billion euro ($1.39 billion) purchase of Sal. Oppenheim in March.

Given the amount of restructuring needed, BHF is expected to fetch around half of its 650 million euro book value, people close to some of the bidders said.

BHF, a 150-year-old institution with roughly 1,500 employees and around 40 billion euros in client assets under management, has drawn interest from several parties looking to expand their wealth management businesses.

Deutsche’s insistence on selling the bank as a whole rather than allowing a partial sale of businesses such as the wealth management unit prompted some bidders to withdraw.

(Reporting by Edward Taylor, Arno Schuetze, Philipp Halstrick, Kathrin Jones; Editing by Michael Shields)