Cerberus cuts Deutsche Bank, Commerzbank stakes in US$500m share sale

[FRANKFURT] US financial investor Cerberus, which has favoured a merger of Deutsche Bank and Commerzbank in the past, on Monday divested a large chunk of its holdings in the two top German lenders, the bank running the sale said.

The sale marks a significant scaling back by one of the most prominent investors in the financial sector of Europe's largest economy and comes at a time when large-scale consolidation in the continent's banking sector is still waiting to happen.

Cerberus, which until now held around 3 per cent of Deutsche Bank and 5 per cent of Commerzbank and had ranked among the top-10 shareholders of both banks, sold 21 million Deutsche Bank shares and 25.3 million Commerzbank shares, Morgan Stanley said.

Cerberus, which took stakes in both banks in 2017, fetched US$502 million in the sale, Morgan Stanley said, a roughly 3 per cent discount to Monday's closing price.

The divestment reduces Cerberus' stake in Deutsche Bank to around 2 per cent, and its stake in Commerzbank to 3 per cent.

Cerberus has committed to a 45-day lock-up period during which it will not sell additional stakes, Morgan Stanley said.

Deutsche Bank and Commerzbank shares were down 1.9 per cent and 4.9 per cent respectively in after-hours German trading following the news.

Cerberus has at times been a vocal investor, demanding changes at Commerzbank in 2020 that prompted a management reshuffle as well as substantial job cuts.

Since Cerberus bought its stakes, shares in both lenders are down more than 20 per cent.

The investor did not respond to requests for comment.

Deutsche Bank and Commerzbank both declined to comment.

REUTERS