Deutsche Bank, West Germany’s largest bank, on Monday emerged as a white knight for Morgan Grenfell Group PLC with a $1.48-billion takeover offer designed to stave off a hostile bid by Banque Indosuez of France.
Analysts said the $8.56-a-share cash offer, which has the full backing of Morgan Grenfell’s board, represented a premium over what the investment bank’s stock was recently trading.
Morgan Grenfell closed at $7.40 a share Friday on the London Stock Exchange; it had fallen as low as $4 a share earlier this year.
“It’s a knock-out bid, one designed to forestall any notion that Indosuez could top it,” said Robert Law, a bank analyst at Shearson Lehman Securities Ltd.
Paris-based Indosuez, which already owns 14.9% of Morgan Grenfell, had no comment on Deutsche Bank’s bid, a spokesman said. But analysts said it was unlikely Indosuez will make a higher offer.
Last month, British insurer Willis Faber PLC sold a 10.6% stake in Morgan Grenfell to Indosuez for $6.38 a share.
Banque Indosuez says it seeks a 24.8% stake but needs Bank of England approval to own more than 15%.
Willis Faber shareholders were to meet Wednesday to decide whether to accept Indosuez’s $7.19-a-share offer for their remaining 9.8% stake in Morgan Grenfell. But Willis Faber appeared unlikely to sell unless Indosuez offered a higher price, and said it was considering suspending the meeting.
In a joint statement, Deutsche Bank and Morgan Grenfell said the British bank “will operate as a separate legal entity within the Deutsche Bank group and with a high degree of autonomy.”