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Shares in troubled German mortgage lender HRE surged on Monday on expectations of a government takeover offer after the government said it was buying an initial 8.7 percent stake as a prelude to a full nationalization. HRE's head office in Munich. Zoom DDP HRE's head office in Munich.
Shares in troubled German mortgage bank Hypo Real Estate jumped as much as 47 percent to ¬1.67 ($2.22) on Monday morning following Saturday's announcement that the government is taking an initial 8.7 percent stake as a prelude to acquiring full control.
The government's bank bailout fund Soffin will buy 20 million new HRE shares for ¬60 million. That is a tiny fraction of the recapitalization HRE needs after getting into trouble in the financial crisis, but it was seen by investors as a sign of the government's commitment to saving the bank.
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