Deutsche Bank Merger Talks Temper Signs of Optimism

[Dover]

By MARK LANDLER - NYT

Published: February 6, 2004


FRANKFURT, Feb. 5 - Deutsche Bank, emerging from a top-to-bottom overhaul of its operations, announced an ambitious new profit target on Thursday. But news of a brief flirtation with Citigroup overshadowed the optimistic outlook.

Deutsche Bank's chief executive, Josef Ackermann, met with Citigroup executives in New York in mid-January to explore the possibility of a deal, executives close to the discussions said. While those discussions were preliminary and general in nature, they followed a meeting that the chairman of Citigroup, Sanford I. Weill, had with Chancellor Gerhard Schröder of Germany in Berlin last summer. Mr. Weill sounded out Mr. Schröder on how the government would respond to a takeover, according to an executive close to the situation.
The Financial Times reported on Thursday that Deutsche Bank had broached, then ended talks, about a deal with Citigroup, because of Mr. Ackermann's worries about its political fallout in Germany.


..snip..

For Mr. Ackermann, a Swiss-born investment banker, the speculation about Deutsche Bank's future comes as he stands trial in Düsseldorf. He and other former directors of the telecommunications conglomerate Mannesmann are accused of paying improper bonuses to its executives amid a takeover battle with the Vodafone Group of Britain.

If the court convicted Mr. Ackermann, he would almost certainly have to resign, which analysts say would hobble Deutsche Bank at a time of potentially seismic change in the banking industry.

Adding to Deutsche Bank's headaches, the bank's former chief executive and its current board chairman, Rolf E. Breuer, is being sued in the United States on allegations that public comments he made about the debt-ridden media empire of Leo Kirch helped precipitate its collapse.

Some rivals of Deutsche Bank said its public resistance to a takeover, and its suggestion that one might meet political hurdles, was intended to buy time until these legal distractions were cleared up....

http://www.nytimes.com/2004/02/06/business/worldbusiness/06bank.html

[Turley]

1. 66.50 - 66.60 I'll do 50K either way. Let me know.

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