UniCredit’s push for Commerzbank is set to enter its most fraught stage next week, as Andrea Orcel prepares to convert a long-running stake-building campaign into a formal takeover offer while Germany’s political and corporate opposition hardens. According to reports in the German press, the sequence begins with a shareholder meeting in Milan on 4 May to authorise a large new share issue, followed a day later by the planned unveiling of the bid.
The proposal still rests on the same exchange ratio set out in March: 0.485 UniCredit shares for each Commerzbank share. Since then, however, the numbers have moved sharply against the Italian lender. Commerzbank’s market value has risen to about €40 billion and its shares ended last week at €35.23, leaving the original terms looking stale and fuelling speculation that any successful approach would need to be improved. Market data also suggest the stock has become technically stretched, with takeover hopes driving a powerful rally over the past year.
Commerzbank is meanwhile preparing its own counteroffensive. The bank is due to publish first-quarter results and an updated strategy on 8 May, alongside higher financial targets designed to bolster the case for independence. That argument was strengthened by last year’s revenue of about €12.2 billion, and it will be reinforced again at the annual meeting on 20 May, where shareholders are expected to vote on a dividend of €1.10 a share, up from €0.65, and on permission for buybacks of as much as 10% of the company’s capital. Management has also complained that UniCredit has not set out integration costs or a convincing timetable, while arguing that the offer does not properly reward shareholders.
The political backdrop is just as significant. The German government, still a major shareholder, has made clear it does not want the deal to proceed, and Finance Minister Jörg Kukies has already described UniCredit’s approach as overly aggressive and opaque, according to CNBC. Commerzbank has also rejected what it calls a hostile, unilateral move, while trade unions fear job cuts if the tie-up goes ahead. Yet the European Central Bank has been more open to cross-border consolidation, leaving Orcel with some regulatory support even as analysts warn that a full acquisition could dent UniCredit’s core capital ratio by roughly 200 basis points. If the Italian bank secures only a narrow majority, Scope Ratings says the hit could be even larger.
For now, the decisive battleground is likely to be institutional investors, who hold about 37% of Commerzbank. UniCredit already owns close to 30%, putting it near the German threshold that would trigger a mandatory offer. If the bid wins backing, the acceptance period would run for four weeks and any final completion would still be a long way off, with regulatory reviews potentially pushing closing into 2027. That long timetable, together with the prospect of a prolonged political fight, means the premium embedded in Commerzbank’s share price may be tested as much by patience as by price.
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Source: Noah Wire Services