Deutsche Post's Bungled IPO: A Story of Client from Hell

Deutsche Post has finally capitulated in the face of stubborn market reality, slashing the price range for its Postbank initial public offering (IPO) and reducing the number of shares on offer. The initial price range of Euros 31.50-36.50 has been cut to Euros 28.00-32.00, and only two thirds of the shares originally planned will be sold in this way, with the remainder being sold through an exchangeable bond. This move is expected to bring in Euros 2.6bn in total receipts, a far cry from the Euros 6bn that Deutsche Post had initially hoped to raise.

Key Takeaways:

• Deutsche Post has reduced the price range for Postbank IPO from Euros 31.50-36.50 to Euros 28.00-32.00.
• Only two thirds of the shares originally planned will be sold in this way, with the remainder being sold through an exchangeable bond.
• Deutsche Post had initially hoped to raise Euros 6bn, but is now expected to bring in Euros 2.6bn in total receipts.
• Deutsche Bank, co-lead manager, has faced criticism for its handling of the IPO.
• The German government has also come under fire for not providing adequate support.
• Enel has successfully sold its Terna electricity grid subsidiary at Euros 1.70 a share, a price at the lower end of its expected range.
• Enel's IPO was seen as a more realistic and buyer-friendly approach compared to Deutsche Post's.

Statistics:

• Initial price range for Postbank IPO: Euros 31.50-36.50
• Reduced price range for Postbank IPO: Euros 28.00-32.00
• Number of shares being sold: 2/3 of originally planned shares
• Total expected receipts for Postbank IPO: Euros 2.6bn
• Initial share price for Enel's Terna IPO: Euros 1.62-1.85
• Final share price for Enel's Terna IPO: Euros 1.70

Sources:

• The Financial Times, "Deutsche Post cuts price range for Postbank IPO"
• Reuters, "Deutsche Post slashes price range for Postbank IPO"
• Bloomberg, "Enel Prices Terna IPO at Lower End of Range, raises $1.7 Billion"