UniCredit to strengthen stake in Commerzbank to 30%

UniCredit launched a bid to increase its stake in Commerzbank to over 30%; This is an important regulatory threshold if the lender initiates a full takeover bid.

Milan-based UniCredit currently holds a 28% stake in Commerzbank, with approximately 26.04% of the shares being held, with the remainder comprised of total return swaps.

The deal is expected to include a bid-exchange ratio of 0.485 UniCredit shares per Commerzbank share; This means a price of 30.80 euros per Commerzbank share or a 4% premium.

UniCredit shares have fallen by 10.5% since the beginning of the year, while Commerzbank’s share price has fallen by more than 18% since the beginning of the year.

Under German takeover regulations, the 30% stake requires a mandatory offer for the remaining shares. UniCredit’s proposal aims to overcome this 30% gap before reaching control.

UniCredit CEO Andrea Orcel said she didn’t expect the stock to rise much above 30%. In comments quoted by Reuters, Orcel added that increasing its stake to 100% would consume 200 basis points of the bank’s capital.

“A complete takeover scenario is a remote possibility,” Orcel said.

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

The offer is expected to be officially launched in early May, with UniCredit holding an Extraordinary General Assembly meeting on May 4 to obtain permission for the relevant capital increase.

The German government holds approximately 12.72% of Commerzbank shares. BlackRock is the third largest shareholder with 5.73% and Norges Bank Investment Management owns 3.14%.

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