Germany’s second-largest lender Commerzbank AG (CRZBY) is exploring a sale of its UK property business in a potential deal worth 5 billion pounds or $7.4 billion, the Financial Times reported Monday, citing people familiar with the process. According to the report, private equity groups are trying to put up bids for the business.
U.S. real estate investment companies including Blackstone Group LP (BX), Lone Star and Starwood Capital have reportedly expressed interest in buying all or part of Eurohypo in the UK. The deal, if materialized, would be the largest portfolio of loans sold by a bank in Europe since the financial crisis.
According to the FT report, the 5 billion pound price tag represents the nominal value of the UK loans owned by Eurohypo, the majority of which are performing well. The sale of Eurohypo in the UK is being managed by UK lender Barclays plc (BCS, BARC.L).
The European Commission in 2012 allowed Commerzbank to wind down Eurohypo, changing a previous agreement that would have forced the bank to sell the unit by 2015. Commerzbank was bailed out by the German government in 2009 with a cash infusion of 18 billion euros.
CRBZY closed Monday’s trading at $1.91, down $0.01 or 0.52 percent on a volume of 158,790 shares.
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by RTT Staff Writer
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