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Commerzbank Group Has Backup Plan

June 26, 2000

FRANKFURT, Germany (AP) _ A group of Commerzbank’s major shareholders is ready to step in if the merger plans being worked out with cross-town rival Dresdner Bank falls through, according to a Monday newspaper report.

Italian insurer Assicurazioni Generali, Italian bank Banca Intesa and Spain’s Banco Santander Central Hispano, which have a combined stake of around 11 percent in Commerzbank, plan to buy the rest of the German bank and divide it among themselves if Commerzbank can’t hook up with Dresdner, the German business daily Handelsblatt reported.

The three financial houses have also been offered the 17 percent stake held by Cobra, the German arm of Dutch investment group Rebon, which is the bank’s largest shareholder, according to the report.

Commerzbank would not comment on the report, but investors were encouraged. They drove Commerzbank shares up 3.4 percent in midday Frankfurt trading.

Banco Santander Central Hispano denied it was joining the Italian companies to offer a joint bid. ``We haven’t spoken to the Italians yet,″ Banco Santander co-chairman Jose Maria Amusategui said Monday.

Cobra also denied the Handelsblatt report. Chairman Hansgeorg Hofmann told German news agency VWD that it hadn’t made an offer to any of the three other shareholders.

He said CoBra had only exchanged ideas with Generali and Banco Santander about its involvement with Commerzbank, but hadn’t actually discussed an offer.

``There were no concrete talks about a sale, and there has been no offer for our stake so far,″ Hofmann said.

Commerzbank and Dresdner confirmed last week that they were examining the possibility of some kind of cooperation, which could include a merger into Germany’s second-largest bank behind Deutsche Bank.

Dresdner backed out of a merger deal with Deutsche in April when Deutsche wanted to dump Dresdner’s highly profitable investment arm, Dresdner Kleinwort Benson, in favor of its own.

Commerzbank, Germany’s fourth largest bank just behind Dresdner, has been the subject of takeover rumors as analysts say it lacks the weight to continue standing alone.

According to Handelsblatt, Commerzbank and Dresdner appear to be making real progress in their merger talks.

It said they have agreed on the rough outlines of a joint strategy and are now starting talks on the structure of a possible deal, with top-level talks to be continued this week and several working groups looking into a detailed strategy for a full merger.

Both banks said last week ``discussions are at a very early stage.″

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