(Bloomberg) -- Oldenburgische Landesbank AG, the private equity-backed German lender, selected banks to advise on a potential initial public offering as dealmaking in the country’s finance industry intensifies, people with knowledge of the matter said.
OLB is working with Deutsche Bank AG, Goldman Sachs Group Inc. and UBS Group AG as it explores options including a listing, according to the people, who asked not to be identified because the information is private.
The primary goal of the OLB board and the bank’s owners is an IPO, subject to market conditions, Chief Executive Officer Stefan Barth said in an interview last month. A listing as soon as November or December is possible, though next spring is more likely, according to Barth. A valuation of “well over” 1 billion euros ($1.1 billion) is realistic, he said.
Barth also said at the time OLB isn’t ruling out alternatives to an IPO. The lender, which serves retail and corporate clients, is cutting its workforce by about a third.
OLB is owned by Apollo Global Management Inc., Teacher Retirement System of Texas and Grovepoint Investment Management. It was created through the combination of several smaller German lenders, including some previously owned by UniCredit SpA and Allianz SE.
Deliberations are ongoing, and there’s no certainty they will lead to a deal, according to the people. OLB’s owners could also consider a sale of the business, the people said.
Spokespeople for OLB, Deutsche Bank, Goldman Sachs and UBS declined to comment. A representative for Apollo didn’t immediately respond to queries.
Deal discussions in German banking have been accelerating in recent months. The timing of any transaction could be tricky, as the Ukraine war has been weighing on bank stocks and a potential recession may drive loan defaults.
Last year, Advent International and Centerbridge Partners offered to buy German real estate lender Aareal Bank AG, but they failed to get enough support from shareholders.
BayernLB, one of the nation’s biggest regional banks, is in the early stages of exploring strategic options for its retail unit Deutsche Kreditbank AG, people with knowledge of the matter said in January. Hamburg Commercial Bank AG’s owners are also considering a sale, Handelsblatt reported this month.
The German banking market is underinvested and ripe for consolidation, Barth said in the February interview.
“It has been talked about for a long time, but hardly anything has happened so far. The prospect of rising interest rates could make German banks more attractive to foreign bidders again,” he said.
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