Real estate finance: Hypo drive a fast bargain

Hypo Real Estate has agreed to buy Depfa Bank for €5.7 billion. The announcement came as a big surprise to many in the market. Unlike the protracted ABN Amro bid, the deal appears to be free of hindrances. There had been speculation that Dexia SA, Europe’s biggest public sector financier, would come in with a bid. However, despite Depfa’s shares having risen nearly 6.5% early in July as a result of such speculation, an offer never materialized. Hypo Real Estate’s takeover will create a public sector lender to rival Dexia. Dexia has some €271 billion held in public sector and infrastructure assets. Depfa and Hypo combined have €254 billion.