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July 6, 2008, 9:25 a.m. EDT

Deutsche Postbank sale could fail due to high price: report

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By Berlin Bureau

BERLIN (MarketWatch) -- The planned sale of Deutsche Postbank AG (DPB.XE) could fail because main shareholder Deutsche Post AG (DPW.XE) is asking too much money, according to an advanced-released report due in Monday's WirtschaftsWoche weekly magazine.

Citing unnamed sources from the finance ministry, the magazine says Deutsche Post values Deutsche Postbank, which is Germany's largest retail bank by customers, at over EUR10 billion while current non-binding offers for the bank have been at EUR8 billion to EUR9 billion.

"This is too little for Post," the magazine cited a person familiar with the situation as saying. The supervisory board is insisting on a two-digit billion sum which none of the preferred bidders is willing to pay. In addition, Deutsche Post is increasingly having reservation against a sale of the stabile financial unit because its core business logistics is getting under pressure due to the high oil price, the magazine says.

Spanish bank Banco Santander S.A (STD) and U.K. rival Lloyds TSB Group PLC /zigman2/quotes/200709414/composite LYG -3.05% are still interest in the bank, it says. Deutsche Bank AG is also still interested, but the German bank is not willing to pay more than EUR10 billion, WirtschaftsWoche says. Commerzbank AG is no longer eying Postbank because it is currently focusing at its possible merger with Dresdner Bank, which is a unit of insurer Allianz SE's .

Deutsche Bank, Commerzbank and Deutsche Post declined to comment on the report. A spokesman for the finance ministry also declined to comment.









-Contact: 201-938-5400

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