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China Firm Backs Deutsche -- WSJ

18 Feb 2017 7:32 am
By Jenny Strasburg 

Chinese conglomerate HNA Group holds a 3.04% stake in Deutsche Bank AG through a European asset manager, according to securities filings.

HNA Group holds the stake through C-Quadrat Asset Management (UK) LLP, the U.K. subsidiary of C-Quadrat Investment AG, founded by Austrian investor Alexander Schütz.

A Frankfurt-based spokesman for the investors said Friday that HNA purchased the shares through a special-purpose vehicle managed by C-Quadrat. It wasn't clear how much HNA Group paid for its stake, which crossed the 3% threshold this week, triggering public disclosure. The buyer's spokesman, Thomas Katzensteiner, wouldn't comment on when the shares were purchased or at what price.

At Friday's price, the 41 million-share stake was worth about EUR755 million ($805 million). Deutsche Bank shares were down 2.7% in Friday trading as of midafternoon, at EUR18.02. Over the past year, they have ranged from EUR9.90 to EUR19.95.

C-Quadrat holds the voting rights for HNA in its Deutsche Bank stake, Mr. Katzensteiner said. The Chinese investors "do not rule out" increasing their stake, but their intentions are to "stay below 10%" of outstanding Deutsche Bank shares, Mr. Katzensteiner said.

He added: "They're seeing Deutsche Bank as an attractive investment in the financial sector. They want to support the bank and the management."

In a separate statement issued through a different spokesman, HNA said its Deutsche Bank holding is passive, and it wouldn't comment on whether it might increase its stake. The statement called any characterizations of its intentions "purely speculative."

Mr. Katzensteiner said neither C-Quadrat nor HNA would comment Friday about Deutsche Bank's strategy. Asked whether either firm has suggested any changes at the bank or shared opinions with Deutsche Bank about its businesses or management, Mr. Katzensteiner said: "They trust fully in the current management."

A Deutsche Bank spokesman said Friday that the lender "welcomed in principle any investor with a long-term view."

HNA Group, controlled by Chinese tycoon Chen Feng, owns domestic assets including airline and shipping firms and hotel chains. The conglomerate has been expanding globally of late. In October 2016, HNA agreed to buy a 25% stake in Hilton Worldwide Holdings Inc. from Blackstone Group LP for $6.5 billion.

HNA's Deutsche Bank stake makes it the lender's third-largest shareholder, behind members of Qatar's royal family and giant U.S. money manager BlackRock Inc., according to public filings.

The German lender's shares are up 4.4% this year after hitting multiyear lows in 2016, when investors were shaken by concerns about legal-settlement costs, flagging profits and a potential move to raise capital by selling new stock.

Deutsche Bank executives have said they meet capital requirements and want to avoid issuing shares.

Write to Jenny Strasburg at jenny.strasburg@wsj.com

(END) Dow Jones Newswires

February 18, 2017 02:32 ET (07:32 GMT)

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