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Deutsche Bank Launches Stock Offering for Capital Infusion
Deutsche Bank AG is looking to raise 8 billion euros or $8.6 billion by issuing 687.5 million new shares, with a price discount of 35 percent to last week's closing price as the German bank looks to prop up its capital and bolster growth.
The stock offering will be priced at 11.65 euros, in accordance with the guidance issued on March 5. The offer compares to the finishing price of 17.86 euros per share on Friday and is 41 percent down from the stock's trading price when it was reported that the lender was mulling a share sale. Existing shareholders are allowed to buy one new share for each two they currently own.
The sale will be held from March 21-April 4. This marks the fourth capital infusion of the bank since 2010. CEO John Cryan initially did not want to seek help from shareholders, but was prompted to reverse this stance after shares were almost twofold from their September trough and the bank was not able to find a rightful bidder for its consumer banking unit.
The firm said it will also cede a majority shareholder position in its asset management company via an IPO in the next two years, aside from minor asset sales. This is seen to raise another 2 billion euros worth of capital.
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