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| Version 2 | Version 3 |
|---|---|
| German government in Hypo offer | German government in Hypo offer |
| (9 minutes later) | |
| The German government has launched a takeover offer for troubled lender Hypo Real Estate (HRE). | The German government has launched a takeover offer for troubled lender Hypo Real Estate (HRE). |
| The government's bank rescue fund said it was offering shareholders 1.39 euros per share, 15.8% higher than its last closing price of 1.20 euros. | |
| HRE has been Germany's highest-profile casualty of the financial crisis. | HRE has been Germany's highest-profile casualty of the financial crisis. |
| The rescue fund said if HRE were to become insolvent, there would be "substantial consequences" for national and international financial markets. | |
| Last month, the German government moved to take an 8.7% stake in the firm, buying 60m euros ($67m; £54m) worth of new shares. | |
| If HRE were to become insolvent, this would have substantial, barely quantifiable consequences for the national and international financial markets German government's bank rescue fund | |
| The bank said at the time that the move was "a prerequisite for the intended recapitalisation of Hypo Real Estate" that the government "gain full control". | The bank said at the time that the move was "a prerequisite for the intended recapitalisation of Hypo Real Estate" that the government "gain full control". |
| HRE reported a net loss of 5.46bn euros for 2008, and so far the government has provided it with loan guarantees of about 87bn euros. | |
| The offer price values the shares the government does not already own at 290m euros. | |
| Shares in HRE rose 15% in early trade. | Shares in HRE rose 15% in early trade. |
| New powers | New powers |
| In February, the German government agreed a draft law that would allow it to temporarily nationalise troubled banks, which was seen as paving the way for a takeover of HRE. | In February, the German government agreed a draft law that would allow it to temporarily nationalise troubled banks, which was seen as paving the way for a takeover of HRE. |
| And a new law signed this week gives the government the power to potentially force shareholders to sell their stakes in order to take control of banks, if voluntary efforts fail. | And a new law signed this week gives the government the power to potentially force shareholders to sell their stakes in order to take control of banks, if voluntary efforts fail. |
| The government's bank rescue fund - the Financial Markets Stabilisation Fund (SoFFin) - said in a statement: "If HRE were to become insolvent, this would have substantial, barely quantifiable consequences for the national and international financial markets. | |
| "This in turn would have a considerable impact on the entire national economy." | |
| US private equity firm JC Flowers currently owns 25% of HRE, but it has signalled that it will not accept an offer below 3 euros per share. | US private equity firm JC Flowers currently owns 25% of HRE, but it has signalled that it will not accept an offer below 3 euros per share. |
| A spokesman for the investor said: "There is still a clear preference to remain a shareholder and thus to be treated exactly the same as other shareholders that had to go under [Germany's bank] rescue shield." | A spokesman for the investor said: "There is still a clear preference to remain a shareholder and thus to be treated exactly the same as other shareholders that had to go under [Germany's bank] rescue shield." |