UniCredit to strengthen stake in Commerzbank to 30% laying groundwork for potential takeover

UniCredit has launched an offer to build its stake in Commerzbank above 30%, a key regulatory threshold if the lender is to launch a full takeover bid

The Milan-headquartered UniCredit already holds a 28% stake in Commerzbank, comprising about 26.04% in shares with the rest in total return swaps.

The deal is expected to involve an offer exchange ratio of 0.485 shares of UniCredit per share of Commerzbank, implying a 30.80 euro price per Commerzbank share, or a 4% premium.

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UniCredit.

UniCredit shares are down 10.5% year-to-date, while Commerzbank’s share price has fallen more than 18% since the start of the year.

Under German takeover regulations, a 30% stake requires a mandatory offer for the remaining shares.  UniCredit’s bid is designed to overcome this 30% cliff-edge without reaching control.

UniCredit CEO Andrea Orcel said he does not expect the stake to go significantly above 30%. Taking its stake to 100% would eat up 200 basis points of the bank’s capital, Orcel added in comments reported by Reuters.

“A full takeover scenario is remote,” Orcel said.

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Unicredit makes takeover bid for Commerzbank

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Orcel told CNBC last June that Commerzbank’s share price then was too high for a merger deal.

The offer is expected to formally launch at the start of May, with UniCredit set to hold an Extraordinary General Meeting on May 4 to seek authorization for the related capital increase.

The German government holds about 12.72% of Commerzbank shares. BlackRock is the third biggest shareholder, with 5.73%, with Norges Bank Investment Management holding 3.14%.

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