Deutsche Bank loses lawsuit over acquisition of Postbank.
- Deutsche Bank has announced that it will examine the judgement and has provisioned for all outstanding claims by the plaintiffs, including accrued interest.
- In the case, 13 plaintiffs argued that Postbank, acquired by Deutsche Bank through several interest purchases from Deutsche Post, was worth more than the 25 euros ($27) per share paid in 2010.
On Wednesday, Cologne's higher regional court ruled in favor of shareholders in a long-standing legal dispute with the lender, who alleged that the lender underpaid in its multi-stage acquisition of German retail bank Postbank.
In the case, 13 plaintiffs argued that Postbank, acquired by Deutsche Bank through several interest purchases from Deutsche Post, was worth more than the 25 euros ($27) per share paid in 2010.
Instead of receiving the payment of 13 euro per share as entitled, the 13 plaintiffs, former shareholders of Deutsche Postbank (Postbank), were entitled to a significantly higher payment of 57.25 euro per share, which was the price at which Deutsche Bank bought its initial 30% stake in Postbank, just days before the collapse of Lehman Brothers and the onset of the global financial crisis, which delayed the takeover.
Deutsche Bank and Postbank finally merged in 2018.
The ongoing legal disputes related to the transaction have negatively impacted Deutsche Bank's financial outlook, causing a decline in its performance, including a loss of 143 million euros in the second quarter, resulting from a 1.3-billion-euros provision linked to the Postbank proceeding.
In August, nearly 60% of plaintiffs in the case reached settlements with Deutsche Bank.
In the third quarter, the lender released 440 million euros of litigation provisions, resulting in a better-than-expected net profit attributable to shareholders of 1.46 billion euros ($1.58 billion) over the period.
Deutsche Bank has announced that it will examine the Wednesday ruling and has already set aside provisions to cover all outstanding claims made by the plaintiffs, including any accumulated interest.
The German Federal Court has not granted a further appeal, and Deutsche Bank will evaluate whether to submit a non-admission complaint (motion for leave to appeal) after receiving the written reasoning for the decision, according to a Deutsche Bank spokesperson.
The lender's shares were down 2.3% at 10:58 a.m. London time.
— CNBC's Sophie Kiderlin contributed to this report.
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