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Cerberus Eyes Bid for HSH Nordbank

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Suitors are lining up. Picture source: Reuters.

HSH Nordbank has attracted another international suitor. Cerberus Capital Management, one of the world’s largest financial investors with more than $30 billion (€27.5 billion) in assets, is eyeing a bid for the ailing public bank, according to Handelsblatt sources in the financial industry.

The New York-based private equity firm has joined its US rival Apollo and the Chinese insurance company Anbang in expressing interest in HSH Nordbank. Cerberus is particularly interested in HSH Nordbank’s non-performing shipping loans, sources told Handelsblatt.

The Chinese conglomerate HNA, which recently boosted its stake in Deutsche Bank, had previously expressed interest in HSH Nordbank, but has decided to pass. “Neither the HNA Group nor any of its subsidiaries will make an offer,” a company spokesperson told Handelsblatt.

The field of potential buyers has narrowed to less than 10. Half are financial investors and the rest are strategic buyers.

The bidding process has entered a key phase, with the suitors now being granted access to HSH Nordbank’s books. The Hamburg-based bank consists of a core bank and a bad bank with €22 billion in non-performing loans, mostly from the shipping industry.

Once the largest shipping financier in the world, HSH Nordbank was hit hard when the financial crisis spread to the shipping industry. The city state of Hamburg and the federal state of Schleswig-Holstein, the majority owners, have pumped billions in the bank to keep it afloat.

The European Commission, the EU executive, has ordered Hamburg and Schleswig-Holstein to find a buyer for the ailing bank. If a buyer is not found by February 2018, the bank will be wound down.

The field of potential buyers has narrowed to less than 10. Half are financial investors and the rest are strategic buyers. HSH Nordbank’s owners remain optimistic that they will find the right suitor. “Our expectations regarding the sale process have improved in recent weeks,” said a spokesperson for Hamburg’s finance senator.

Frank Drost is a Handelsblatt editor in Berlin, covering financial supervision and banks. To contact the author: drost@handelsblatt.com

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