Bidding to re-open for Bankgesellschaft Berlin?

US banker J. Christopher Flowers has teamed up with Texas Pacific to mount a new bid for the troubled German bank.

Christopher Flowers, the US investment banker formerly with Goldman Sachs, and Texas Pacific Group, the private equity group, are joining forces to renew their bid for Bankgesellschaft Berlin (BGB), the troubled German regional bank, according to a report in the Financial Times.

The two groups, which both specialise in turnaround situations, have formed a company called BGB Capital Partners to make a bid. BGB Capital Partners has not disclosed how much it is likely to bid for the bank, which is 81 per cent-owned by the City of Berlin.

In addition to Christopher Flowers and Texas Pacific, which had previously made separate bids, the only other known interested party is a German consortium including NordLB, a state-owned bank, and the DSGV German savings bank association.

BGB, Germany's tenth-largest banking group and the only German institution to combine state and private-investor ownership, recently avoided becoming the latest in a string of major German insolvencies when Berlin's new senate voted to cover all the bank's potential liabilities for the next 30 years, which could run to as much as E21bn.

That decision cleared the way for a sale of the City of Berlin's stake in the bank, which rose to 81 per cent after it fully underwrote a E1.7bn capital increase for the group to make up for the losses it had incurred in its real estate business.