The offer period for the transfer of equity to form the basis for the merger of two German banks began yesterday amid considerable interest from retail investors.

The offer is the first stage in the merger of Bayerischen Vereinsbank and Bayerischen Hypotheken-und Wechselbank which will ultimately create Germany's second largest commercial bank.

Shareholders in Hypo-Bank are being offered one share in insurance group Allianz AG for every six Hypo-Bank shares held.

The Allianz shares come from Vereinsbank's portfolio and will allow it to take up to 45 per cent of Hypo-Bank.

A spokesman for Vereinsbank said yesterday that 500 people had called for detailed information by early afternoon but added that an initial report on the interest established would not be available until today. The swap offer, which is valid up until September 10th, had already received a notable level of interest from institutional investors, the spokesman said.

For the transaction to go ahead at least 40 per cent of Hypo-Bank shareholders must take up the offer, which has been recommended by the management boards of both banks.

The deal must also be approved by the German cartel office.

Hypo-Bank shares, which rose about 30 per cent when the deal was announced two weeks ago, closed DM1.30 lower at DM72.80 yesterday.