Bank regulator gives ultimatum in Deutsche's BHF sale: sources

Fri Aug 16, 2013 12:03pm EDT
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By Alexander Hübner and Edward Taylor

FRANKFURT (Reuters) - German regulator Bafin has set an end of August deadline for investors to submit information needed to approve Deutsche Bank's (DBKGn.DE: Quote) sale of BHF to a consortium headed by RHJ International (RHJI), two people familiar with the process said.

The consortium originally agreed to buy the Frankfurt-based lender from Deutsche Bank in March 2012, only to see Bafin refuse to approve the deal, citing concerns about BHF's ability to withstand a crisis on a standalone basis.

RHJI beefed up its offer in September 2012 by bringing in more investors including China's Fosun Group (0656.HK: Quote), BMW (BMWG.DE: Quote) heir Stefan Quandt, and funds controlled by U.S. investor Timothy C. Collins and Blackrock.

Bafin has been evaluating the consortium since.

One of the people familiar with the approval process said on Friday that Bafin had asked asset manager Blackrock (BLK.N: Quote), which is part of the consortium, to provide details about how they would support BHF in a crisis.

A key concern is whether Blackrock would take part in a capital increase in the event that further funds need to be provided to support BHF, another person familiar with the matter said.

"The regulator doesn't want another problem case," the person said.

RHJI, Blackrock and Deutsche Bank all declined to comment.   Continued...

The headquarters of BHF-Bank is pictured in Frankfurt September 20, 2012. REUTERS/Kai Pfaffenbach