Cerberus Bids Nearly $850 Million for a Once-Major Shipping Lender

  • Apollo remains only other serious suitor for the lender
  • Owners to meet on Jan. 15 to decide on next step in auction

Cerberus Capital Management LP and J.C. Flowers & Co LLC are edging closer to acquiring HSH Nordbank AG after jointly offering more than 700 million euros ($850 million) for the once-stricken lender, according to people familiar with the matter.

Rival private equity firm Apollo Global Management remains the only other contender for buying the commercial lender, the people said, declining to be identified because talks are private. The bank’s owners, the states of Hamburg and Schleswig-Holstein, are set to meet Monday to decide on the next step.

Officials for Cerberus, J.C. Flowers, Apollo and HSH declined to comment.

HSH Nordbank, a long-time lender to the shipping industry in Germany’s northwestern port cities, must be privatized by next month or wound down to comply with conditions set by the European Union to approve the 2009 bailout of the bank, which was on the brink of collapse. In recent years, HSH Nordbank Chief Executive Officer Stefan Ermisch has cut troubled assets, defying skeptics who had questioned whether the bank could be sold at all.

HSH Nordbank last year more than halved the volume of souring assets in its non-core unit to about 7 billion euros, while the new business in its core commercial banking operations remained stable at about 8.9 billion euros, people familiar with the matter said.

Betting on Banks

J.C. Flowers already owns 5.1 percent of HSH Nordbank, and Cerberus last year emerged as a large shareholder in Deutsche Bank AG and Commerzbank AG. New York-based Cerberus, run by Stephen Feinberg, is also the biggest shareholder in Austrian lender Bawag Group AG, which last year agreed to take over German commercial lender Suedwestbank AG.

Apollo-owned Bremer Kreditbank last year agreed to buy Allianz SE’s 90 percent stake in Oldenburgische Landesbank for 300 million euros.

Both Cerberus and Apollo, led by Leon Black, are deemed to pass regulators’ muster as potential buyers, the people said. London-based Socrates Capital, which had also made an offer for the lender, is less likely to succeed, they said.

An official for Socrates didn’t respond to a call and message seeking comment.

— With assistance by Steven Arons, and Sarah Syed

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