IKB Auction Off?

FRANKFURT, June 8 (Reuters) – Germany's Finance Ministry on Sunday warned of a hasty sale of the government's stake in stricken lender IKB, saying the intentions of three remaining bidders would have to be thoroughly examined.

“There is a good chance that the sale succeeds but the federal government will not play into the hands of the bidders,” said deputy finance minister Thomas Mirow in an interview with Berlin newspaper Der Tagesspiegel.

“There will not be a sale at any price,” he said in the story for publication on Monday, which was issued in advance.

The federal government holds a 45 percent stake in IKB via state-owned development bank KfW [KFW.UL].

The potential bidders, which financial sources say are financial investors Lone Star [LS.UL] and Ripplewood as well as Swedish bank SEB (SEBa.ST: Quote, Profile, Research), should tender their binding offers by mid-July and a decision might be made by September, media have reported.

IKB had to be propped up by a series of rescue packages that have cost about 8.5 billion euros ($13.27 billion), with the federal government alone picking up 1.2 billion euros of the total and KfW covering most of the rest.

Financial sources said last Monday the government and KfW are negotiating guarantees for billions of euros in risky assets on the books of IKB to help facilitate the sale. (Reporting by Vera Eckert; Editing by David Cowell)