Deutsche Bank Said Near Full Takeup for $8.5 Billion OfferBy and
Investors said to agree to exercise more than 95% of rights
The shares are trading well above their price in the offering
Deutsche Bank AG is poised to receive orders for almost all of the 8 billion euros ($8.5 billion) of stock on offer to investors as the sale draws to a close, according to people familiar with the matter.
Investors have pledged to buy more than 95 percent of the stock on sale in the rights offer, which ends Thursday, said the people, asking not to be identified because the details aren’t public. About 80 percent of existing investors decided to participate in the capital increase, with some opting to boost their exposure and new investors buying the rest, said one person.
The shares are trading well above their offer price, a key factor in attracting demand, having rallied more than 60 percent from their September low. Deutsche Bank shares were little changed at 15.64 euros as of 2:38 p.m. in Frankfurt. The German lender previously announced that it’s issuing 687.5 million new shares at 11.65 euros apiece.
The capital increase -- the bank’s fourth since 2010 -- is the centerpiece in Chief Executive Officer John Cryan’s new turnaround plan, which he announced in early March after Deutsche Bank failed to sell its Postbank unit to bolster capital. The company’s key Qatari shareholders are buying shares to maintain their stake, according to people familiar with the matter. Chinese investor HNA Group Co. has built up its stake to about 4.8 percent, and that number may increase, said one person with knowledge of the firm’s strategy.
“Cryan has done a good job,” said Ulf Moritzen, a fund manager with Aramea Asset Management AG, who is using the capital increase to increase his fund’s exposure. “I see upside to Deutsche Bank, especially if interest rates rise in the euro area.”
Christian Streckert, a spokesman for the bank, declined to comment. The final subscription numbers will only be known after the sale closes.
The offer price for the shares is almost 41 percent lower than the price when Bloomberg first reported that the bank was weighing a capital increase. Existing investors can acquire one new share for every two they now hold.