DrKW - A 'Victim' Of Its Own Success ?

During the bad old days at DrKW (and there have been some of those over the last few years), there was much talk of the sale or spinning off of Dresdner Bank's investment banking arm. Trouble was, there were few takers and little appetite when the days were dark. On the back of eight consecutive quarters of operating profits, however, all of a sudden the firm looks a much more attractive proposition. According to media reports, in fact, DrKW's German insurance company owner, Allianz, has knocked back at least three approaches for the unit in the last few months.

Now that, you would think, would be the end of it. Allianz drew a line in the sand earlier this year and said that it was sticking with DrKW at least into 2006. But, no. Someone has been stoking the 'up for grabs' flames again. Rumours have been circulating that Allianz does, indeed, have its price.

But Allianz is not in the mood for a 'get rich quick' deal. According to The Financial Times, an unnamed source 'close to the matter' is said to have told the newspaper that DrKW's owner might, at some stage, be interested in some kind of regional distribution deal for its insurance products and DrKW could feature in some way in any eventual deal. But that's the sum of it. A Japanese bank is said to have been mentioned as 'an ideal partner' for Allianz in this respect.

The newspaper says that some of DrKW's senior bankers had become somewhat frustrated about the lack of clarify around the future of the unit and, unless this was resolved, there were fears that there was a possibility of a 'mass exodus' next Spring after bonuses.

The smart money, however, is now on Allianz coming out next year and giving DrKW a further period to see what it can do. The irony is, though, that the more successful the firm becomes, the harder it will be for Allianz to fight off attractive approaches or deals. Having said this, a sale, spin off or strategic deal will no doubt make some happy staff a nice tidy sum.

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