Direkt Anlage in £558m online broker purchase

Germany's third-largest online broker, Direkt Anlage Bank, yesterday unveiled a 911m euro (£558m) all-share takeover of its Paris-based counterpart Self Trade in an agreed deal that will take DAB into most European markets.

Germany's third-largest online broker, Direkt Anlage Bank, yesterday unveiled a 911m euro (£558m) all-share takeover of its Paris-based counterpart Self Trade in an agreed deal that will take DAB into most European markets.

DAB is paying almost 30,000 euros per customer, highlighting the way valuations of online broking businesses are proving robust despite the slump in other internet-related shares.

Self Trade, which has just under 30,000 clients, operates in France and the UK and is expanding in Italy and Spain. The combined group would rank behind Comdirect and Consors as the number three online brokerage in Europe, with 325,000 client accounts.

Analysts welcomed the deal, saying it strengthened DAB's position in a market growing at an exponential rate. "Relative to other deals in the sector, they haven't overpaid at all," said one analyst. "What you're buying is the growth and prospective customers."

But DAB's shares, quoted in Frankfurt, slumped on the announcement by more than 12 per cent. It is issuing 12.5 million new shares to fund the acquisition.

Huw van Steenis, an analyst at JP Morgan, said: "Online brokerage is breaking out like an epidemic across Europe." DAB has already set itself apart from the pack by focussing on asset gathering to became a leading fund supermarket, he said, and the Self Trade acquisition would give it opportunities for further growth outside Germany.

DAB already has 68 per cent acceptances for its four-for-one share swap from Self Trade's shareholders. Hypovereinsbank, which owns 71 per cent of DAB, is backing the offer.