* Germany's KfW says to place 5 pct in Deutsche Post
* Equals some 60 mln Deutsche Post shares
* Price to be about 950 mln eur
* Germany's stake in Deutsche Post to shrink to 25.5 percent
* Deutsche Post free float to rise to about 74.5 pct
FRANKFURT/LONDON, Sept 6 The German government
is shrinking its holding in Deutsche Post to a
quarter by selling a 5 percent stake in the former mail monopoly
for about 950 million euros ($1.2 billion).
The country has targeted billions of euros of proceeds from
privatisations this year as the government is keen to
consolidate public finances amid the euro zone's sovereign debt
State development bank KfW, which holds the German
government's stake in Deutsche Post, said on Thursday it was
selling the 60 million shares to institutional investors in an
accelerated bookbuilding process.
The sale did not come out of the blue. Germany's economy
ministry said late last year it would examine the possibility of
exiting its holdings in Deutsche Post and in former state
monopoly Deutsche Telekom.
Three people familiar with the process told Reuters in June
that KfW had approached investment banks about the sale of at
least part of its stake in Deutsche Post.
KfW is taking advantage of a rally in the share price of the
Bonn-based mail provider that has taken the stock to its highest
level in almost four years and given the company a market value
of 19 billion euros, according to Thomson Reuters data.
In the past three months alone, Deutsche Post shares have
gained 22 percent.
"We thought this was a suitable moment for a placement," KfW
said in a statement, promising not to divest more shares in
Deutsche Post for 90 days in a so-called lock-up agreement
The stock would be sold for at least 15.70 euros a share
and priced on Friday, said Bank of America Merrill Lynch
, which is the bookrunner of the sale, while Rothschild
After the placement of the shares the company's free float
will increase to around 74.5 percent from approximately 69.5
"We welcome any new shareholder as well as a broader basis
of our shareholders," said a spokeswoman for Deutsche Post.
The placement comes as other transactions are still ongoing.
The privatisation of real estate companies TLG Immobilien
and its subsidiary TLG Wohnen, valued at more than 1.7 billion
euros, is targeted by the end of the year.
Germany also owns a 25 percent stake in the country's
second-biggest bank, Commerzbank.