News reports indicate that the German government initiated today a tender offer for shares of ailing German financial institution Hypo Real Estate AG (Hypo RE). The shares are being offered for purchase at €1.39 per share, approximately 9% higher than the bank’s trading value at the close of markets yesterday. Shares will be purchased by Germany’s Financial Markets Stabilisation Fund (SoFFin), which has already provided a string of bailout funds for Hypo RE over the last several months.
The offer is being seen by many analysts as a “last chance” effort by Germany to encourage voluntary sales of Hypo RE shares to the German government before it utilizes its newly enacted power to nationalize banks and force the remaining shareholders to sell. The German government has acknowledged for months its intention to nationalize the bank in order to restore its stability.