UniCredit has announced plans to increase its stake in Commerzbank beyond the critical 30% threshold, a regulatory requirement that would facilitate a full takeover bid for the German lender. Currently, UniCredit holds a 28% stake in Commerzbank, which breaks down to approximately 26.04% of shares and the remainder in total return swaps.
The proposed deal includes an exchange offer where UniCredit aims to provide 0.485 of its shares for each Commerzbank share, translating to a valuation of €30.80 per Commerzbank share, representing a 4% premium over the current market price.
As of this year, shares of UniCredit have declined by 10.5%, while Commerzbank has seen a more significant drop of over 18%. According to German takeover regulations, acquiring a stake above 30% necessitates a mandatory offer for the remaining shares, and UniCredit’s strategy appears designed to navigate this regulatory landscape without fully attaining control of Commerzbank.
UniCredit’s CEO, Andrea Orcel, has indicated that the intention is not to push the stake significantly above the 30% mark. He emphasized that pursuing full control, which would absorb a notable 200 basis points of the bank’s capital, remains unlikely. Last June, Orcel stated that the then-current share price of Commerzbank was too elevated to justify a merger.
The formal launch of the offer is anticipated to take place at the beginning of May, coinciding with an Extraordinary General Meeting scheduled for May 4, where UniCredit will seek approval for a capital increase related to the deal.
Additionally, the German government is noted to hold approximately 12.72% of Commerzbank’s shares, while BlackRock and Norges Bank Investment Management are the second and third largest shareholders, holding 5.73% and 3.14%, respectively.
This situation continues to develop, and further updates will follow as the news unfolds.
