Anbang Insurance Group of China is reportedly in talks to buy pbb Deutsche Pfandbriefbank from its parent Hypo Real Estate Holding (HRE) in a deal said to be valued at €1.5 bn.
Anbang Insurance Group of China is reportedly in talks to buy pbb Deutsche Pfandbriefbank from its parent Hypo Real Estate Holding (HRE) in a deal said to be valued at €1.5 bn.
According to a news report by the Wall Street Journal, the Chinese insurer has tabled a bid for the real estate lending division which is expecting binding offers later this month.
US private equity firm Blackstone Group is also said to have expressed an interest in Pbb.
pbb Deutsche Pfandbriefbank was officially put on the market in February through Citigroup and Deutsche Bank with its parent group looking to divest its entire stake or exit through an initial public offering.
The move was ordered by the European Commission as a condition for HRE to receive a €10 bn bailout in mid-2008.
Pbb is 100% owned by HRE which, in turn, is fully owned by SoFFin, the Financial Market Stabilisation Fund set up by the German government following the collapse of Lehman Brothers in September 2008 to stabilise the German banking industry.
The German government nationalised Hypo Real Estate in the aftermath of Lehman Brothers' collapse and the real estate lender received a €10 bn capital injection as well as €145 bn in liquidity guarantees under the condition it would sell pbb at a future date.
Pbb is a major European provider of finance for commercial real estate and public-sector investments. It is the largest issuer of Pfandbriefe (German covered bonds) by volume, and originated a record €10 bn of new business in 2014 across its real estate finance and public investment finance division.
The bank currently has a balance sheet of over €76 bn, of which about €24 bn in real estate finance. PBB’s five major lending markets in Europe are Germany, the UK, France, CEE, and the Nordic countries.
