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Second Activist Builds Aareal Bank Stake, Eyeing Tech Unit Sale

Jan-Henrik Förster and Matthias Wabl

(Bloomberg) -- A second activist investor has built a position in Aareal Bank AG and plans to support a full sale of the German real estate lender’s software business.

Petrus Advisers Ltd. owns just over 2% of Aareal Bank, the London-based investment firm’s founder, Klaus Umek, said by phone Tuesday.

“We think the software unit should be sold -- there’s more potential in there,” Umek said.

Aareal Bank is currently working on a sale of as much as 30% of its software and services division Aareon, people with knowledge of the matter said in July. After Bloomberg News reported the stake sale plans, activist hedge fund Teleios Capital Partners called on the bank to sell the entire business. Analysts have valued the unit at about 550 million euros ($599 milllion).

German banks are streamlining businesses under pressure in an overcrowded market where lenders are grappling with negative interest rates. Selling the software division could help Aareal to deal with difficulties in its U.K. operations, where non-performing loans for shopping centers have been piling up.

Shares of Aareal Bank have risen 2% this year, giving the company a market value of about 1.65 billion euros. A spokesman for Aareal Bank declined to comment.

Activists have been stepping up pressure on European banks. Petrus said last week it has increased its holding in Commerzbank AG’s listed online subsidiary, Comdirect Bank AG, to just over 3%. Cevian Capital revealed a stake in Finland-based lender Nordea Bank Abp in December. Investor Edward Bramson’s Sherborne Investors Management LP became one of the biggest Barclays Plc shareholders last year and has slammed the new chairman’s strategy.

--With assistance from Scott Deveau.

To contact the reporters on this story: Jan-Henrik Förster in London at jforster20@bloomberg.net;Matthias Wabl in Vienna at mwabl@bloomberg.net

To contact the editors responsible for this story: Dinesh Nair at dnair5@bloomberg.net, Ben Scent, Matthew Monks

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