Deutsche Bank, Commerzbank shares drop after mysterious $2 billion stake sale

Deutsche Bank, Commerzbank shares drop after mysterious $2 billion stake sale
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Deutsche Bank AG and Commerzbank AG shares dropped, after a major investor sold down its stake in Germany’s two largest publicly listed banks. 

An unidentified investor is looking to raise 1.38 billion euros ($1.5 billion) by selling 116 million shares in Deutsche Bank, while Commerzbank shares worth 508 million euros ($555 million) are up for sale by an unnamed investor, according to terms seen by Bloomberg.

Deutsche Bank shares dropped as much as 8.3% and Commerzbank stock fell 7.9% when markets opened on Tuesday. 

There are currently only two investors in Deutsche Bank that own sufficient shares for such a large sale – BlackRock and Capital Group. BlackRock is largely a passive investor and most of its stake is tied to Deutsche Bank’s membership in various stock indexes and thus can’t be sold as one. 

The sale of major stakes in the two lenders comes just three months after private-equity firm Cerberus started unwinding its stakes in the same firms, essentially pulling the plug on an investment that proved a losing bet. It also follows on the heels of the decision by U.S. investment firm Capital Group to pull back from Barclays Plc.

Both Deutsche Bank and Commerzbank are locked in ambitious turnaround programs to boost their profitability. The prospect of rising interest rates in the euro area boosted their share prices at the beginning of the year though the war in Ukraine more recently has cast a shadow over the outlook for the banking industry.

The undisclosed investors offer Deutsche Bank share at a price range of 10.98 euros to market price, or the stock’s Monday close of 11.924 euros. Commerzbank stock meanwhile is being offered at 6.52 euros to 7.012 euros. Morgan Stanley is arranging the share sales. The holders are exiting their stakes in the two companies, the terms showed. 

Spokespeople for Capital Group and Commerzbank declined to comment.

“We remain confident in our strategy as laid out during our Investor Deep Dive in March,” a spokesperson for Deutsche Bank said. “Our focused business model and risk management capabilities have proven their resilience in challenging times. As we said during our investor day, we have had a promising start into the year and our objectives remain unchanged.”

Large stake sales have begun to flood the market in recent days with stakes being offloaded in the likes of energy firm E.ON SE, planemaker Airbus SE, financial firm London Stock Exchange Group Plc and mining giant Glencore .

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