Depfa pices rise on speculation of Deutsche Bank takeover

March 30 | Updated: Mar 31 2006, 05:30am hrs
Shares of Depfa Bank Plc, Europes second-largest public-finance provider, posted their biggest increase in almost eight months amid speculation that Deutsche Bank may consider bidding for the bank. The stock rose as much as 4.3%, its biggest rise since August 2005, and traded up 4% at 14.82 euros in Frankfurt on Thursday.

Although its very unlikely that Deutsche Bank would be interested in buying Depfa, the stock is cheap and many investors are speculating on a takeover offer, said Dirk Becker, an analyst at Kepler Equities, who recommends buying the shares. Its no surprise that the shares react quite strongly on acquisition rumors.

German newswire dpa-AFX earlier on Thursday reported Deutsche Bank might bid for Depfa, citing unidentified traders.

Deutsche Bank spokesman Ronald Weichert declined to comment. Depfa Bank spokesman Henrik Hannemann reiterated that it doesnt see itself as a takeover target because of its highly specialised business model. He declined to discuss market rumors.

Ive heard the rumor in the market, said Knut Hochwald, a trader at Fairtrade Finance AG in Hamburg. I think it would fit, but I dont know if theres any truth to the rumor. Depfa lends to public-sector authorities worldwide and uses its strong credit rating to refinance these loans at lower rates.