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European IPOs over the Web
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January 25, 1999: 10:07 a.m. ET
Deutsche Bank to market initial public offerings via new Internet service
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LONDON (CNNfn) - Starting in March, hundreds of thousands of private investors across Europe will be able to get in on the ground floor of initial public stock offerings by logging on to a new web site sponsored by Germany's Deutsche Bank.
The Frankfurt-based global banking giant unveiled plans Monday to create a new venue in cyberspace - www.IPO@db.com - where companies about to go on the public block can make their pitch directly to potential investors.
While cyber investing is hardly a new phenomenon in the United States, where investors routinely glean information about public offers from the Internet, Deutsche's move into virtual IPO vending marks a watershed among big-league European financial institutions.
It also comes less than two months after Deutsche Bank inked a $10 billion transatlantic merger deal with New York-based Bankers Trust that will create the world's largest banking company, ahead of Switzerland's UBS. The combined entity will have $800 billion in assets.
Deutsche Bank said its web site will target 575,000 customers throughout Germany and Switzerland, including those who currently subscribe to its low-cost service, Bank 24.
The service will enable online investors to access information about IPOs from the issuers, rather than through a marketing intermediary, as is typically the case.
Interested investors will also be able to subscribe directly to an IPO by filling out a form on their computer screen.
The site could eventually give Deutsche Bank a portal into other hard-to-penetrate European markets, such as France, Italy or Spain, where Deutsche Bank might normally have trouble luring customers.
Because the Internet, by definition, is a borderless domain, physical proximity to clients need not be a foremost concern, analysts say.
And with the newly launched European common currency reducing the risks of translation from one country to the next, Deutsche Bank appears well positioned to take advantage of the growing commercial opportunities.
"We've got the Internet lessening the need for branches and the euro…The idea is that in time people will bank with Deutsche as they used to bank with other banks," said Peter Thorn, banking analyst with Paribas in London.
Deutsche Bank is expected to use its site to help market 10 German IPOs before this summer and will eventually branch out into wider continental deals, The Wall Street Journal reported Monday.
The newspaper said the bank was deferring for the moment from launching an English-language version of the site to avoid any impression that it is trying to enter the U.S. IPO market.
While that may be an eventual goal, Deutsche Bank will delay its English site until, and if, it has garnered approval from American regulators. All companies issuing IPOs in the U.S. are required to register with the Securities and Exchange Commission; such rules do not apply in Europe, where IPO issuance tends to be less stringently regulated.
Deutsche Bank has already introduced the Internet service to 175,000 customers at its Bank 24 service. The March launch of the IPO site will mark a further extension of that service to thousands of the bank's customers in Germany and Switzerland.
The Journal said Deutsche Bank may accompany the launch of its site in March with the IPO of an unspecified U.S. Internet company with European operations. The IPO, the newspaper said, could raise between 125 million euros ($145 million) and 150 million euros.
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Deutsche Bank
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