UniCredit Raises Stake in Commerzbank Amid Opposition
Italy’s leading financial institution, UniCredit, has significantly increased its stake in Commerzbank to 34.4%, a move that has faced considerable resistance in Germany. The stake was acquired through a takeover offer that commenced on May 5. This latest development has been reported in the weekly figures released by UniCredit as per German takeover regulations. It was disclosed that shareholders had tendered stock equivalent to 7.6% of Commerzbank’s capital.
Details of the Offer
The offer to acquire the stake in Commerzbank is set to remain open until June 16. It is noteworthy that the offer is currently below the market price. In such scenarios, it is not uncommon for large investors to hold off until the closing days of the acceptance period before making a decision on whether to tender.
UniCredit had previously stated that the share exchange was an intentional move designed to increase its holding from 27% to slightly above the 30% level. This threshold triggers a mandatory takeover, thereby enabling UniCredit to acquire additional Commerzbank shares on the market subsequently.
UniCredit’s Holding and Derivatives
In addition to the shares directly owned by UniCredit, the bank also possesses derivatives linked to 16.4% of Commerzbank’s share capital. These instruments can mostly be settled in cash, granting UniCredit the flexibility to trim its eventual holding if necessary. Including some share-settled derivatives, UniCredit’s overall holding in Commerzbank reaches 37.6%.
Germany’s Stance on the Takeover
The German finance ministry, which still holds 12% of Commerzbank, has categorised UniCredit’s approach as hostile. Despite the latest developments, the government’s stance remains unchanged and continues to draw attention.
Pressure on UniCredit’s Chief Executive
UniCredit’s Chief Executive, Andrea Orcel, is facing mounting pressure to complete the transaction successfully. He had previously retreated from several earlier takeover attempts since assuming his role in 2021. Orcel has emphasized that UniCredit must meet certain return requirements and evade a scenario where regulators deduce that the bank controls Commerzbank without holding a majority stake.
Terms of the Offer
As per the terms of the offer, UniCredit is offering 0.458 new UniCredit shares for each Commerzbank share tendered. Based on Monday’s closing price of €73.72 for UniCredit stock, the offer values Commerzbank at €35.75 per share, compared to Commerzbank’s Monday close of €37.
UniCredit maintains that the early response to the tender reflects the inherent value that investors recognise in UniCredit’s takeover offer. Investors have additional time to consider both the relative value offered in the exchange of Commerzbank shares for UniCredit shares and the incremental value potential from the combination.
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