Commercial Bank seeks to hinder acquisition
Whispers have been circulating for quite some time that UniCredit is eyeing a takeover of Commerzbank. Recently, these whispers transformed into actions as the Italian banking titan purchased a significant stake in the Frankfurt-based institution. Commerzbank is now scrambling to ward off this potential takeover and has enlisted the assistance of influential figures.
As per insider sources, Commerzbank is attempting to thwart a possible takeover by UniCredit. The management is brainstorming strategies to preserve the bank's autonomy, a source familiar with the situation revealed.
Two other sources stated that while the bank is open to negotiations if UniCredit makes an official proposal, the board is actively pursuing an independent path. Furthermore, it was reported that the U.S. investment bank Goldman Sachs has been hired to examine various defensive strategies. Commerzbank chose to remain silent on the matter.
The Italians made their move as the government announced the sale of its shares. They subsequently increased their stake in Commerzbank, currently holding about 9% of the bank's shares.
On Wednesday, UniCredit scooped up almost half of its Commerzbank shares from the German government. The government sold around 4.5% to UniCredit, who were willing to pay a premium significantly higher than the shares' value on Tuesday evening. The remaining shares offered by the government were all allocated to UniCredit due to "a substantial oversubscription of all other bids," the finance agency in Frankfurt declared. Typically, discounts are applied in such large placements.
UniCredit's Surprise Entrance into Germany
Notably, as reported by ntv from corporate circles, both Commerzbank and the government were taken aback by UniCredit's entry. There were no prior indications or discussions. The move is being viewed as "unfriendly" and it is assumed that UniCredit seeks to acquire the bank.
UniCredit declared its intention to explore opportunities to enhance value for shareholders of both banks, in conjunction with Commerzbank. If necessary, it will seek regulatory approval to increase its stake beyond 9.9%.
Commerzbank merely acknowledged UniCredit's entry and left its future course of action undecided: "The Management Board and Supervisory Board of Commerzbank will continue to act in the best interest of all our shareholders, as well as employees and customers."
UniCredit had earlier made its presence known in the German banking market approximately 20 years ago. In 2005, it acquired the German Hypovereinsbank (HVB) for around 15 billion euros and has since been a prominent player in the German retail banking market. Over the years, there have been recurring speculations that the Italians would acquire Commerzbank and merge it with their German subsidiary, Hypovereinsbank.
UniCredit and Commerzbank, both, suffered heavily during the 2008/2009 financial and economic crisis and the EU debt crisis at the beginning of the last decade. Their stocks plummeted by over 90%. However, their situations have significantly improved since then, particularly due to the recent surge in interest rates. The recovery at UniCredit, however, has been more robust.
Commerzbank is actively considering defensive strategies to preserve its autonomy in light of UniCredit's growing stake, as they are suspected of pursuing a takeover. The Germans were reportedly taken aback by UniCredit's sudden move to acquire a significant stake, with no prior indications or discussions.
