- Deutsche Bank consents to the major claims raised by the litigants in the Postbank acquisition case
In the ongoing dispute over Deutsche Bank's acquisition of Postbank shares, the bank has managed to reach a settlement with a substantial number of displeased former shareholders. This agreement has boosted the bank's pre-tax earnings by a substantial 430 million euros in the third quarter. A consensus was reached outside of court with over 80 complainants, representing around 60% of all claims, at a price of 31 euros per share, as proposed by Deutsche Bank.
Among the plaintiffs who have agreed to this settlement is the largest individual claimant, responsible for approximately one-third of all claims. The bank anticipates that these settlements will, on average, absorb around 45% of the provisions. If further settlements can be reached with additional plaintiffs, the impact on the total provisions set aside for this case could be significantly more substantial.
Provisions of 1.3 billion euros have been established.
The catalyst for this dispute was Deutsche Bank's majority acquisition of Postbank in 2010. There's a question over whether the forced purchase of minority shareholders in that year was justified, and if Deutsche Bank had already gained effective control of the Bonn institute prior to the public takeover offer for Postbank in 2010 - leading to shareholders being underpaid.
During an oral hearing at the end of April, the Higher Regional Court of Cologne indicated that it may side with the plaintiffs. Deutsche Bank has set aside 1.3 billion euros in anticipation of this outcome, resulting in a 143 million euro loss for the DAX company in the second quarter.
The bank is considering reaching settlements with other disgruntled shareholders who have not yet joined the consensus, which could further impact the provisions set aside for this case. Despite the significant number of former shareholders involved in the dispute, there are still other parties whose concerns need to be addressed.
