DealZone

Haider’s heirs disown troubled Hypo bank

When the late Joerg Haider, the hard-right populist governor of the southern Austrian state of Carinthia, sold most of his government’s stake in Hypo Group Alpe Adria in 2007, he said, beaming: “Ladies and Gentlemen, Carinthia is rich.”

BayernLB, which like many other German landesbanken appears to have never met a toxic asset it didn’t like, had just paid 1.65 billion euros for a 50 percent stake in Hypo. Around half of that went into Haider’s government’s coffers.

Haider/Porsche

True to his pork-barrel politics, Haider used the funds to, among other things, subsidise Carinthian teenagers’ driving licence fees, scrap kindergarten fees, and pay out cash to Carinthian families to “offset inflation” in 2008, conveniently timed shortly before an election.

This worked to cement Haider’s image as the generous leader looking after the man on the street. But since his death in a car crash last year, it shows that the basis of this policy was not sustainable. Hypo is now in urgent need of another year-end emergency capital injection of more than 1 billion euros, after it went cap in hand to the Austrian government and BayernLB for 1.6 billion euros last year already.

Hypo’s breakneck expansion in the former Yugoslavia is the main reason for its continued losses this year. Haider and his confidante, ex-CEO Wolfgang Kulterer, started and presided over this expansion, which let Hypo’s balance sheet balloon to more than four times what it was in 2002. (This is the same Kulterer who pleaded guilty last year of false accounting during his time as Hypo CEO.)Hypo HQ

Road to fortune or highway to hell?

GM-OPEL/That will ultimately be the question asked about what kind of a future the German carmaker Opel faces.

Parent General Motors said on Thursday that it indeed wanted
to sell a majority stake in the unit to Canadian auto parts
group Magna and Russia’s Sberbank, a decision long favoured by the German government under Chancellor Angela Merkel.

With about two weeks to go until a general election in
Europe’s biggest economy, this would clearly be a political
victory — but the question remains whether it will also be an
economic one.

SPAC IPOs return

The team behind cash shell company Germany1 is preparing to list its next special purpose acquisition company (SPAC) in October after Thursday’s 532 million euros deal with AEG Power.

A SPAC is a shell company set up by people with a proven track record in making acquisitions. They offer takeover targets a way to become public companies without having to undertake an initial public offering.

In this case, Germany1′s acquisition makes power system firm AEG a public company through a so-called ”back door” listing. 

No deal on Opel as GM needs more cash – again

opel1What’s surprising: Talks for General Motors Corp’s Opel failed to yield a deal.

What’s not-so-surprising: GM needs cash. Again.

Talks that ran all through Wednesday night to sell Opel to one of four final bidders narrowed the race to two but failed in sealing a deal. German ministers, emerging in the early hours of Thursday morning after more than 12 hours of talks, blamed GM and the U.S. Treasury for the failure.

Why? Because GM, the ministers say, shocked participants by announcing it needed 300 million euros ($415 million) more in short-term cash from the German government to  keep Opel operating.

VW-Porsche deal stalls

Volkswagen has called off a round of merger talks with Porsche, a source close to VW Chairman Ferdinand Piech said, adding talks would not resume until Porsche’s financial situation was clear. Porsche preferred shares hit the skids as fears that the financial engineering needed to pull off the deal may be beyond even German know-how.

Despite a healthy sports car business that the holding company says still earns enough to make interest payments on 9 billion euros ($12.19 billion) in net debt, the listed parent of Porsche is reported to be sounding out German state bank KfW about a 1 billion euro loan. Porsche declined direct comment on the report, saying only: “We do not name the banks with whom we negotiate.”

The families that control Porsche have a 51 percent stake in VW and they would like to drive that to controlling interest of 45-55 percent in the combined entity. Analysts have gone to the drawing boards and been able to figure out how Porsche, a 6.8 billion euro company, swallows VW, a 70.3 billion euro company. Accounting for preferred shares and other market inefficiencies, they calculate VW’s actual market cap at as little as 25 billion euros; on a comparable basis, Porsche holds a 14.1 billion euro equity stake.

from Funds Hub:

Finding a buyer

Another day and another report of a company looking to exit its hedge fund operation.

rtr237ljAccording to a report in today's FT, Germany's Commerzbank has put its $900 million fund of hedge fund manager Comas up for sale, although it may close it down if no buyer is found.

Only last week Spanish bank BBVA said it would close down its alternative investment businesses, including hedge funds, and give investors their money back.