UniCredit tests Germany’s RESO
UniCredit’s Commerzbank bid is facing resistance from management and Berlin, as Orcel is pushing to exceed the 30% threshold and force a takeover.
UniCredit’s new takeover offer for Commerzbank, launched in mid-March, is facing opposition from both the Frankfurt-based lender and the German government, which owns a 12.7% stake in the bank.
UniCredit currently holds a 26% direct stake in Commerzbank and an additional 4% through financial derivatives. It aims to exceed the 30% mandatory takeover threshold, which would trigger a mandatory bid that would allow the Milan-based bank to freely increase its stake on the open market.
The offer is structured as a swap of 0.485 UniCredit shares for each Commerzbank share; At the implied price of €30.80, the offer values the German lender at about €35 billion ($40.5 billion). Commerzbank CEO Bettina Orlop rejected the offer, which included a nominal premium of 4%, calling it “unacceptable” and not in line with the bank’s standalone approach.
UniCredit CEO Andrea Orcel, known for his aggressive expansion strategy, said he would improve terms only in the presence of a “common plan” that benefits all stakeholders. He said he could offer more favorable exchange ratios and a higher cash component.
A leading pan-European banking group with a significant presence in 13 key markets, UniCredit is Italy’s second-largest lender, with total assets of €870 billion. Commerzbank is one of Germany’s leading commercial banks, with total assets of €590 billion and customers in more than 40 countries around the world.
A potential alliance between the two lenders would create one of the largest credit institutions in Europe and a major financial power internationally. However, some observers are skeptical. “UniCredit sees value in pursuing hostile swap proposals, even if they are doomed to fail,” comments Paola Biraschi, managing director and European bank credit analyst at CreditSights, a Fitch Solutions company.
“This happened with Banco BPM [last year]And it’s going to happen again with Commerzbank. From an economic point of view, the formalization of an offer for 100% of Commerzbank enables [UniCredit] To increase its stake above 30% without violating any regulatory limits. But it also has strategic implications, and a reputational cost that may ultimately be associated with the failure of the strategy. “Only time will tell whether such a hostile approach can yield results.”
