While it may appear to be a cheap shot to criticise
Deutsche Bank's takeover and rescue of Germany's venerable
Sal. Oppenheim in the summer of 2009 one aspect of the transaction can definitely be described as representing poor management practice. As this
report illustrates, the decision to bid for the bank was made with undue speed and it is clear that proper due diligence would not have been possible. Time may have been of the essence - it always is in rescue bids - but the bidder can only gain from any delay. If the situation the target finds himself in (Merrill Lynch, HBOS, Dresdner Bank) is really dire the value of the asset has only one way to go: Down. Managements of highly rated organisations such as
Bankamerica, Deutsche Bank,
Lloyds TSB or
Commerzbank should really be aware of this simple fact and all managements in all acquiring companies should never feel under time pressure (real or imagined) - as
Terra Firma's Guy Hands found out to his cost when bidding for EMI.
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