BNP Paribas (BNP) SA is in talks to buy IKB Deutsche Industriebank AG (IKB) from Lone Star Funds in a deal that may help France’s largest bank add corporate clients in Germany, according to three people familiar with the matter.
An agreement may be reached as early as the second quarter, said the people, who declined to be identified because the talks are private. SEB Bank AB is also a potential bidder in the sale, which is being managed by Perella Weinberg Partners LP, one of the people said.
A purchase by BNP Paribas may help the Paris-based lender win more medium-sized corporate clients under the stewardship of Achim Klueber, said the people. BNP Paribas hired the banker in December from Royal Bank of Scotland Group Plc for the new post of head of corporate & transaction banking Europe. Lone Star took control of IKB, Germany’s first casualty of the U.S. subprime mortgage crisis, in August 2008 and used 9.6 billion euros ($13.5 billion) of government guarantees to help revive the Dusseldorf-based bank.
“BNP has said multiple times that it wants to expand its German corporate coverage and IKB is one of the few assets available that fits the profile,” said Christoph Bossmann, an analyst at WestLB in Dusseldorf who has an “add” rating on BNP. “Refinancing is still an issue at IKB, but those concerns would subside under the umbrella of BNP.”
BNP Paribas spokesman Dirk-Michael Mitter declined to comment, as did Kimmo Best, a spokesman for SEB in Frankfurt, and IKB spokesman Patrick von der Ehe. Lone Star couldn’t immediately be reached for comment.
It remains open whether BNP and Lone Star will reach an agreement on the terms, and a buyer could eventually purchase parts of the lender, leaving assets such as the leasing business, the people said.
Lone Star, a Dallas-based buyout firm, paid about 137 million euros for IKB and said in October that it was seeking a strategic partner for the lender.
The private-equity firm boosted the lender’s Tier 1 capital ratio to more than 10 percent since the bailout by shedding toxic assets, IKB said in February. The German bank also reduced total assets to 34.2 billion euros at the end of 2010. It had to cut assets, sell its Luxembourg unit and reduce real-estate financing to fulfil European Union conditions for state aid.
IKB reported a profit for the third quarter, which ended Dec. 31, and narrowed the loss for the first nine months to 132.2 million euros from 614.6 million euros a year earlier.
Joachim von Schorlemer, the head of BNP Paribas’s German business, said in October that the French bank is targeting “large midcap” corporate clients with annual revenue of at least 1 billion euros and export-driven businesses that may benefit from its international network.
BNP Paribas plans to increase its staff in corporate and investment banking in Germany to between 400 and 450 people by mid-2011, from about 340, he said at the time.