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ING in $2.3B German bid
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August 13, 1999: 6:39 a.m. ET
Dutch financial services giant to acquire BHF, boost German banking presence
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LONDON (CNNfn) - Dutch banking giant ING Group launched a $2.35 billion bid Friday to buy Germany's BHF bank in the latest round of consolidation among European financial institutions.
ING is offering 45 euros a share, a premium of almost one third, for the outstanding shares in BHF, valuing the Frankfurt-based group at 3 billion euros. BHF shares jumped 25 percent to 43 euros in trading on the Frankfurt exchange.
The Dutch firm has already built up a 41.8 percent stake over the past three years in BHF, Germany's sixth-largest publicly-owned bank. ING's initial 34 percent was bought from German insurer Allianz.
BHF's board has recommended the offer to shareholders.
ING aims to use BHF to expand its profitable investment banking operation. BHF has shed much of its retail operation to focus on asset management and investment banking services and has good links with leading German blue-chip companies.
"BHF is a very good entry ticket into the German corporate finance market," said Adran Pilz, banking analyst at London financial brokerage Fox-Pitt, Kelton. He noted that BHF is also expanding its presence in eastern Europe.
ING has virtually no corporate presence in Germany, though it is unclear as yet how closely BHF will be integrated into ING Barings, ING's London-based investment banking arm. ING said BHF would continue to operate under its own name.
ING said the deal would have an immediate positive impact on earnings per share and also offered opportunities for cost savings. "The activities of BHF Bank ideally complement the business portfolio of ING," said ING chairman Godfried van der Lugt in a statement.
Analysts said the one potential downside of the deal could be for ING to lose its regulatory status as an insurer under Dutch law. The insurance classification gives it favorable balance sheet and tax advantages, but the expansion of its banking operations may see it officially reclassified as a bank.
ING shares climbed 1.8 percent to 48.50 euros in Amsterdam.
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ING Groep
BHF Bank
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