FRANKFURT, Germany -- Deutsche Bank AG, Europe's second-biggest bank, said yesterday that it will sell 6 billion deutsche marks ($3.4 billion) of new shares to help finance its purchase of Bankers Trust Corp. and expansion in Europe.
The Frankfurt-based bank, gearing up for its $10.1 billion acquisition of Bankers Trust, originally said it wanted to raise 4 billion marks.
The additional cash will help equip it for "continuing consolidation" in European banking, it said.
"I'm sure it's mainly to do with Bankers Trust, but the Machiavellians will see this as Deutsche Bank raising money as a war chest," said Dino Fuschillo, London-based head of European equities at Societe Generale Asset Management, which manages 750 million pounds ($1.2 billion).
Deutsche Bank's board of directors agreed to acquire Bankers Trust, the parent company of Baltimore-based Alex. Brown Inc., in November in a $10.1 billion takeover.
The move came a month after Bankers Trust, the nation's eighth-biggest banking company, lost $488 million in the third quarter of 1998.
Bankers Trust acquired Alex. Brown in September 1997 for $2.5 billion. Brown employs about 1,500 people in Baltimore, and has enjoyed an impeccable reputation as a blue-chip investment banking company during its two-century existence. The firm is known for taking many fast-growing companies public, such as Microsoft Corp., Starbucks Coffee Co., Outback Steakhouse Inc. and Oracle Systems Corp.
Deutsche Bank, which has slated the share sale for April, said 4 billion marks of the capital increase will be part of a rights issue. The remaining 2 billion marks will be sold to investors worldwide without rights for existing shareholders.
"If there's an opportunity for Deutsche Bank to expand its presence in France, then we are prepared," Chief Executive Officer Rolf Breuer said.
Breuer said the purchase of Bankers Trust is on schedule for completion in the second quarter of this year. By the end of last month, the bank had financed 60 percent of the acquisition by raising cash on international capital markets.
Pub Date: 3/19/99