Munich, Germany (18 December 2020)
Valuation Research Group (VRG), a leading global provider of independent valuation, advisory, and value-related services is pleased to announce that VRG’s Germany-based member firm, ValueTrust has been engaged by the Regional Court of Cologne to act as a court appointed valuation expert in the appraisal proceeding (“Spruchverfahren”) in context of the conclusion of the domination and profit/loss transfer agreement (“DPLTA”) between Deutsche Bank and Postbank in 2012.
In its decision of November 11, 2020 the Regional Court of Cologne based the compensation and guaranteed dividend on the fair market value determined by ValueTrust and fully approved the valuation results.
In particular, the Court accepted the following approaches:
- Derivation of the market value according to “Best Practice Recommendations Corporate Valuation” by DVFA, including the market participant assumption and the principle of equality of valuation methods,
- derivation of the cash compensation based on the Discounted Cash Flow method before personal income taxes (in contrast to Tax-CAPM as required under IDW S1),
- derivation of market risk premium based on historic and implied shareholder returns leading to the upper end of the former IDW range of the market risk premium of 5 to 6% before personal income taxes,
- derivation of guaranteed dividend with reference to the DPLTA-specific risks and cost of debt as minimum interest rate.
The valuation report contains an extensive analysis of the German retail banking market and its regulatory framework, the business plan assumptions, cost of capital, peer group companies, pre-acquisition prices and stock prices as well as trading and transaction multiples.
Valuation Research Group (VRG) is a global valuation practice that furnishes expert and independent opinions of value for solvency, fairness, business enterprises, intangible assets, capital stock, equity interests, real estate and fixed assets. VRG has a network of over 1,300 professionals located in offices throughout continental Europe and the United Kingdom, Brazil, China, India, Mexico, Canada, Argentina, Australia, and the United States. The Germany-based practice operates as ValueTrust.