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Deutsche Bank AG was ordered to pay 14 Postbank shareholders a total of 48 million euros ($57 million) in a ruling that could lead to millions more in compensation for investors who argue the lender short-changed them in a 2010 takeover.
The court in Cologne, Germany, on Friday backed the argument of shareholders who accepted the original offer but dismissed suits by three other plaintiffs who hadn’t tendered their shares. The judges refused requests by those three shareholders and by Deutsche Bank to combine the cases under a special procedure used for group financial litigation, the tribunal’s spokeswoman Miriam Mueller said Friday.
Deutsche Bank spent more than 6 billion euros acquiring stakes in Postbank, reaching about 94 percent in 2012. Shareholders were paid 25 euros per share under the offer. The plaintiffs claimed they should have gotten 57.25 euros because Deutsche Bank should have made a compulsory offer under takeover rules at an earlier stage.
The court on Friday agreed with these arguments, saying they can claim the additional 32.25 euros per share, because Deutsche Bank had agreements with seller Deutsche Post AG that conferred factual control earlier, said Oliver Krauss, a lawyer for half a dozen investors. He said other shareholders could still sue but they would have to do that before the end of the year to avoid losing their claims because of time limitations.
"It’s quite a risk for Deutsche Bank," Krauss said.
Postbank shares traded above 70 euros in early 2007 and had dropped to lower than 9 euros a share two years later.
At the time, Deutsche Bank acquired about 48 millions shares with its offer. If all shareholders win, the total payout would be roughly 1.5 billion euros.
Deutsche Bank said it will review the judgment and is likely to appeal. Whether other investors can still sue is far from clear and still undecided legally, the lender said.
The Postbank acquisition helped the company diversify its funding mix by boosting consumer deposits after the global financial crisis. Deutsche Bank Chief Executive Officer John Cryan in March dropped his previous plan to sell Postbank. He instead decided to embark on a second attempt at integrating the business into the lender’s other German retail unit and it will soon announce additional details of its integration plan.
