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. Last Updated: 07/27/2016

Deutsche Telekom Soft After Latest Share Issue




FRANKFURT, Germany -- Shares in Germany's Deutsche Telekom AG were soft in early trade Monday after the group set a price of 66.50 euros ($63.64) for its latest share issue, slipping to touch a low of 65.90 euros.


The offering of a third tranche of 230 million shares, including an overallotment option, will raise 15.3 billion euros, the bulk of which will flow into state coffers.


Telekom said the third tranche of the company's shares offered to the public was 3.5 times oversubscribed and that demand was higher among retail investors than institutions.


The group said retail investors placed orders for almost 400 million shares and institutional investors for some 300 million in the tranche of 230 million shares.


Horst M?ller, management board member at Dresdner Bank, which was one of the leading consortium banks for the placement, said at a news conference a 30 million share overallotment option would very likely be fully taken up.


Telekom said in a joint statement with the German finance ministry and state-owned development bank KfW, which is selling the shares, that around 70 percent of the shares would be allotted to retail investors and about 30 percent to institutional investors.


In the retail group, Telekom said Japanese and U.S. investors were being allocated about 30 million shares and European investors about 130 million shares.


By 10:35 a.m., Telekom shares were 2.91 percent lower at 66.08 euros from their Friday close of 68.06 euros. The benchmark DAX was 0.45 percent higher.


However, German stock prices on Monday were distorted by the bourse's quarterly reweighting of the index Friday.


Telekom was reweighted to 15 percent of the DAX index of 30 blue-chip companies, and its price was set at 66.16 euros, slightly higher than its current share price.


The group's shares have fallen sharply since setting a year high of 104.90 euros on March 6, hit by concerns about the cost of UMTS third- generation mobile phone licenses and general loss of confidence in the technology and telecommunications sectors.