Germany starts Hypo Real Estate takeover bid

Germany launched Friday its bid to nationalise troubled mortgage lender Hypo Real Estate (HRE), offering to buy 100 percent of the firm's shares at what it termed an "attractive price."

Germany starts Hypo Real Estate takeover bid
Photo: DPA

The German Financial Markets Stabilisation Fund (SoFFin) said it would offer €1.39 ($1.82) per share, around 10 percent more than the minimum the government could offer (€1.26.)

Shareholders have until May 4 to accept the offer, the statement said, adding the government intended to take “full control” of the bank – which is likely to cost Germany €290 million.

“In view of the serious situation in which Hypo Real Estate… currently finds itself, we consider €1.39 to be an attractive price,” said Hannes Rehm, chairman of the SoFFin Management Committee.

He added: “It is in everyone’s interest, the financial markets’, the company’s, its employees’ and customers’, to get this done promptly.”

Berlin is concerned that a collapse of HRE would prompt the sort of financial market chaos that followed the failure of US investment bank Lehman Brothers in September.

he government passed an emergency bank nationalisation law giving it the power to seize investors’ share by force if necessary. The bank’s nationalisation could come at the expense of US investor Christopher Flowers who heads a consortium owning almost 24 percent of the shares in HRE.

Flowers has played his cards close to his chest, saying he will study the offer, but would prefer to remain a shareholder.

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Four injured as WWII bomb explodes near Munich train station

Four people were injured, one of them seriously, when a World War II bomb exploded at a building site near Munich's main train station on Wednesday, emergency services said.

Smoke rises after the WWII bomb exploded on a building site in Munich.
Smoke rises after the WWII bomb exploded on a building site in Munich. Photo: picture alliance/dpa | Privat

Construction workers had been drilling into the ground when the bomb exploded, a spokesman for the fire department said in a statement.

The blast was heard several kilometres away and scattered debris hundreds of metres, according to local media reports.

Images showed a plume of smoke rising directly next to the train tracks.

Bavaria interior minister Joachim Herrmann told Bild that the whole area was being searched.

Deutsche Bahn suspended its services on the affected lines in the afternoon.

Although trains started up again from 3pm, the rail operator said there would still be delays and cancellations to long-distance and local travel in the Munich area until evening. 

According to the fire service, the explosion happened near a bridge that must be passed by all trains travelling to or from the station.

The exact cause of the explosion is unclear, police said. So far, there are no indications of a criminal act.

WWII bombs are common in Germany

Some 75 years after the war, Germany remains littered with unexploded ordnance, often uncovered during construction work.

READ ALSO: What you need to know about WWII bomb disposals in Germany

However, most bombs are defused by experts before they explode.

Last year, seven World War II bombs were found on the future location of Tesla’s first European factory, just outside Berlin.

Sizeable bombs were also defused in Cologne and Dortmund last year.

In 2017, the discovery of a 1.4-tonne bomb in Frankfurt prompted the evacuation of 65,000 people — the largest such operation since the end of the war in Europe in 1945.