Berlin  - The German government's state banking fund Thursday made an offer of 1.39 euros for each share of the troubled mortgage lender Hypo Real Estate (HRE).

The offer was made by the SoFFin fund following Tuesday's signing into law by President Horst Koehler of a controversial bill enabling the state to seize control of HRE.

That measure, described as a last resort to stabilize the German financial market, marks the first time in modern-day Germany that bank shareholders face possible expropriation.

The approval followed adoption by both chambers of the German federal parliament and comes after the government took an 8.7-per- cent stake in the shaky lender as a first step to gaining full control.

The German government has given the Munich-based bank 87 billion euros (117 billion dollars) in state guarantees since it got into difficulties in October last year. The financial sector provided a further 15 billion euros. dpa