July 23, 2020 / 4:03 PM / 14 days ago

Germany's Degussa Bank put up for sale - sources

FRANKFURT (Reuters) - German retail and corporate lender Degussa Bank has been put up for sale, people close to the matter said, as its owners face heavy payments at another lender they own following its involvement in a trading scheme scam.

Sellside advisor PwC plans to send out information packages on Degussa Bank to prospective buyers next month, aiming for a deal to be sealed before the end of the year, they said.

Degussa Bank could be valued at roughly 400 million euros (364 million pounds), one of the people said, adding that its core banking activities could be valued at around 200 million or roughly its book value.

Other activities such as the bank’s real estate and insurance brokerage businesses could be worth roughly the same amount, the person said.

Private equity firms, banks, asset managers and insurance brokers are expected to show interest in the bank, the people said, some of whom expect a total valuation of closer to 200 million euros.

Degussa Bank is majority-owned by Christian Olearius and Max Warburg, who bought it from Dutch lender ING (INGA.AS) in 2006 and who also own Hamburg-based bank MM Warburg.

Degussa Bank’s owners and PwC declined to comment.

German judges in March ordered MM Warburg to pay 176 million euros for its involvement in Germany’s biggest post-war fraud trial of a scam involving multi-billion-euro trades to get bogus tax reclaims. The bank is appealing the decision.

Olearius and Warburg have said in the past that they will financially support MM Warburg in case the bank has to make payments related to its participation in the so called cum-ex transactions.

Degussa Bank, originally a part of precious metals group Degussa (EVKn.DE), has outlets on the premises of many German companies, branding itself as a worksite bank. Separately, it has a residential property unit, Industria Wohnen, which among others sells closed property investment funds, and also owns insurance brokerage Prinas Montan.

In 2019, Degussa Bank reported pretax earnings of 26 million euros.

Reporting by Arno Schuetze; Editing by Susan Fenton

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