The majority of investors led by US private equity firm JC Flowers has rejected Germany’s offer for real estate lender Hypo Real Estate after the board of the bank accepted it. A small minority in the JC Flowers led consortium have agreed to sell their position.
According to multiple reports today, the majority of a consortium led by Flowers which owns a 14 percent stake in Hypo, has rejected the government’s offer of €1.39 a share. A small minority of JC Flowers’ investors, reportedly less than one percent, have agreed to sell their positions.
New York-based Flowers has stated that it believes the shares to be worth more than €1.39 a share. Christopher Flowers, chairman of JC Flowers, has reportedly said: “We believe that with the planned restructuring and adjustment of the business model under the new management, Hypo Real Estate will be able to return to successful and sustainable operation in the medium term.”
The offer by the government has, however, been accepted by the management board of Hypo Real Estate last Friday.
The offer was made by the German government’s German Financial Markets Stabilization Fund and the acceptance period for the offer runs until next Monday. The fund aims to own 100 percent of the shares of Hypo Real Estate by Tuesday 30 June.
Hypo Real Estate has received tens of billions of Euros from the state and German banks as well as other financial institutions after it collapsed last October.