Bank rescue fund acquires 100% of Hypo Real Estate

The nationalisation of German real estate lender Hypo Real Estate was formalised on Tuesday when the Regional Court in Munich entered the transfer resolution for the squeeze-out of Hypo's minority shareholders into the Commercial Register.

This means the transfer of the shares to the Financial Markets Stabilisation Fund (Soffin) takes effect and Soffin now owns 100% of Hypo Real Estate Holding. The resolution on the squeeze-out of minority shareholders was passed by the Extraordinary General Meeting of Hypo on 5 October 2009.

Earlier this week, a group of investors led by US private equity firm JC Flowers filed a suit with Munich court in an attempt to prevent Soffin from squeezing then out. The investors, who own less than 3% of Hypo shares, claim the squeeze-out amounts to a violation of their legal right of ownership.

Hypo has received over EUR 100 bn in German government bailout funds and debt guarantees to keep it afloat after its Dublin-based Depfa Bank unit failed to secure short-term funding in the wake of the financial crisis.

Commenting on Tuesday's action, Hypo Real Estate said the minority shareholders have a claim to a cash payment of EUR 1.30 per share from Soffin.

The Flowers group took more than a 20% share in Hypo in mid-2008 after tabling an offer for up to 50 million shares at a price of EUR 22.50 per share.

Hypo has undergone a major reorganisation in 2009, leading to the creation of Deutsche Pfandbriefbank as its main operating lending bank.