Italian banking giant UniCredit has launched a significant move to increase its stake in German lender Commerzbank to over 30%, a critical threshold that could trigger a mandatory takeover bid under German law. This latest maneuver comes after months of UniCredit’s overtures, which have largely been met with resistance from Commerzbank and the German government.
UniCredit, already holding a substantial 28% stake in Commerzbank (comprising 26.04% in shares and the remainder in total return swaps), has proposed an offer exchange ratio of 0.485 UniCredit shares for each Commerzbank share. This values Commerzbank shares at approximately €30.80, a modest 4% premium over its recent closing price. UniCredit CEO Andrea Orcel stated that crossing the 30% threshold is a strategic step designed to allow for further share purchases on the open market without immediately triggering a full, mandatory bid, which would significantly impact the bank’s capital reserves.
Commerzbank has been quick to dismiss UniCredit’s offer, with CEO Bettina Orlopp asserting that the bid does not deliver sufficient value for its shareholders and emphasizing the bank’s commitment to “independence and profitable growth.” The German government, a significant shareholder with approximately 12.72% of Commerzbank’s shares, also remains resistant to a merger, with the ruling Social Democratic Party reportedly opposing any tie-up.
The move by UniCredit comes as Commerzbank’s share price has seen a notable decline of over 18% year-to-date, while UniCredit shares have fallen by 10.5%. Analysts suggest that UniCredit’s strategy might be to force Commerzbank’s board into negotiations by leveraging German takeover regulations. While a full takeover is described as “remote” by Orcel, the current offer could pave the way for future discussions, potentially leading to a higher premium for Commerzbank shareholders if a deal is eventually struck. The offer is expected to formally launch in early May, pending authorization for a capital increase at UniCredit’s upcoming General Meeting.