Dance of the Cobra
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Dance of the Cobra

Germany Inc doesn’t like outsiders, especially those challenging the fundamental building blocks of German finance. Cobra, a group of opportunistic shareholders, took on Commerzbank and forced it to consider change. But things didn’t go as planned and both sides are licking their wounds. What’s next in the game of who gets what and who pairs off with whom? David Shirreff reports

Even Hansgeorg Hofmann, larger-than-life, engagingly jovial, and one of Germany's few "real" investment bankers, finds it hard to conceal his disappointment. The German establishment has closed ranks and he - let's for the moment call him the embodiment of Anglo-Saxon-style corporate finance - is left beating vainly on their Teutonic shields.

Taking a break from shield-bashing, in his home town of Augsburg, at coffee on the terrace of the Drei Mohren hotel in the September sun, Hofmann reflects on the duplicity of Germany Inc. He explains the schizophrenia: it wants financial reform - in fact major tax reforms are under way - but when it comes to bank consolidation these "overpaid workers" who run the banks will do anything to feed their egos and save their jobs.

Thus Martin Kohlhaussen, head of Commerzbank, brought in a pair of white knights, Assicurazioni Generali of Italy and Banco Santander Central Hispano (BSCH) of Spain, in an old-fashioned cross-shareholding deal to shut out Cobra, a private club of corporate raiders and speculators. Even Kohlhaussen's friends feared he had robbed the bank of flexibility.

Hofmann is Cobra's managing director, although Cobra wasn't his idea. He came in, recommended by another of Germany's "real" investment bankers and a top corporate lawyer, to give the group some gravitas.

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