Investors told to go yellow

Deutsche Post is busily transforming itself into a pan-European logistics company

Germany's post office, Deutsche Post, is pitching for private investors across the continent as it prepares for what will be one of Europe's biggest stockmarket flotations.

Dubbed "yellow shares", because of Deutsche Post's bright-yellow livery, the company is offering its stock to investors in Germany, the UK, Austria, Switzerland, Netherlands, Italy and Spain.

Potential investors outside Germany have been targeted in adverts and mailshots praising the stock offering.

Deutsche Post goes World Net

Until 2002, Deutsche Post will have the monopoly for letter distribution in Germany

Deutsche Post hopes that investors will not see it as a stodgy former monopoly trying to cash in on its market domination.

The company is working hard at transforming itself into a pan-European logistics giant, trading as Deutsche Post World Net.

In a 7bn euros spending spree, Deutsche Post has improved its international reach by snapping up 37 smaller firms in recent years.

Its biggest deal was taking a majority stake in logistics firm DHL International, which handles all activities of the DHL Worldwide Express network outside the United States.

Klaus Zumwinkel, Deutsche Post's chief executive, says he now wants to go easy on new purchases. The focus will now be on the integration of the companies already part of the group.

However, he did not rule out buying into another big foreign post office.

Deutsche Post's robust actions on the marketplace, however, have earned it the attention of the European Union's competition authorities.

There are several anti-trust investigations into Deutsche Post, amid claims that it financed its spending spree with the profits from its letter service monopoly. The letters monopoly is guaranteed until 2002

Analysts say investors should be wary of the European Commission's investigation, although Mr Zumwinkel says that Deutsche Post's profits could easily pay for any fine.

Discount, bonus shares

The privatisation of the former letter and parcels monopoly will see 25% of its shares go for sale on the stockmarket.

Shares will be priced at between 18 to 23 euros, valuing the company at just under 30bn euros.

Private investors signing up now for the share are promised a 0.50 euro discount. If they hold on to their stock until November 2002, they will qualify for "bonus shares".

They will also receive a share in this year's profits, at a dividend of 0.27 euro per share.

Mr Zumwinkel has already promised to return between 25% to 30% of net profits to his shareholders each year.

Deutsche Post hopes to split its share offer 50-50 between private investors and institutional investors.

Trading in Deutsche Post shares is scheduled to start on 20 November.

Cashing in

The privatisation will flush much-needed cash into the coffers of the German government, which hopes that Deutsche Post will emulate the success of the stockmarket launch of Deutsche Telekom, the former telephone monopoly.

The "T-Aktie" or Telekom share, introduced Germany to the concept of mass share-ownership.

Deutsche Post is thinking big, and expects to become a part of Germany's key stockmarket index, the Dax, by May next year.