Bloomberg News

Denizbank Plunges Most on Record as Dexia Seeks Disposal

May 25, 2012

Denizbank AS (DENIZ) plunged the most on record after owner Dexia SA (DEXB) said it had entered exclusive negotiations with Russia’s OAO Sberbank (SBER) to sell the unit for a price below the current market value.

The shares fell 20 percent to 14.20 liras at the close in Istanbul, their biggest loss since at least 2004.

The Moscow-based lender may agree to pay as much as 1.5 times Denizbank’s book value, valuing the bank at about $4 billion, said one person close to the deal, who declined to be identified as the process is private. Denizbank’s current share price gives it a price-to-book ratio of 2.1, according to data compiled by Bloomberg.

Dexia’s annual report in April showed Denizbank had a carrying value at the end of last year of 2.8 billion euros ($3.5 billion), the minimum amount Dexia needs to sell it for to avoid taking a hit to its capital.

To contact the reporter on this story: Benjamin Harvey in Istanbul at bharvey11@bloomberg.net

To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net


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