DEUTSCHE POST COULD RAISE $7.6 BILLION
Deutsche Post AG, the German post office turned international logistics giant, will offer about one-third of its stock for sale to the public on Nov. 20, and could raise 9 billion euro ($7.6 billion), according to European news sources.
In the IPO prospectus, Deutsche Post said it plans to issue on the German exchange 278.2 million to 319.3 million shares. Deutsche Post has a total of 1.11 billion shares. Shares are expected to sell at 20 to 24 euro (about $18 to $22), which would value the sale at 8.8 billion ($7.9 billion) euro and the company at 26.6 billion euro ($24 billion).
KfW, the German state development bank, will sell part of its 50-percent stake in Deutsche Post, the prospectus said, but the German government’s direct 50-percent stake would not be admitted for a stock market listing, cutting the potential market capitalization. Limited equity reduces Deutsche Post’s expected market cap to 13.32 billion euro (about $11 billion).
Deutsche Post also said it will pay $745 million for a 25.6-percent stake in DHL International, paying 73 percent of that cost in shares stemming from KfW and the rest in cash. The DHL shares will give Deutsche Post a controlling interest of 51 percent.
Deutsche Post has already spent more than $3 billion on acquisitions, including large forwarders Danzas and Air Express International, two banks in Germany and many European parcel delivery firms.
Deutsche Post continues to say that multiple investigations into its business practices currently underway at the European Commission will not affect its offering. However, potential fines could weigh on the minds of investors.
The European Commission earlier this month expanded its antitrust investigation against Deutsche Post, exploring allegations that the German post office had contracts with mail order customers which offered royalty and target rebates.
The EU has already started investigations into the high postal rates in Germany and into whether the German post office has illegally used profits from its letter service to fuel its flurry of acquisitions.