(May 5): UniCredit SpA has submitted its Commerzbank AG takeover proposal to the target’s shareholders, initiating a six-week period that will decide the German lender’s independence.
The acceptance period began on May 5 and will last through June 16, UniCredit said in a filing Tuesday. It’s offering 0.485 of its own shares for each one in its rival, implying a price of about €32 per share based on the day’s opening or close to €35 billion for the bank as a whole.
That’s roughly 8% below the target’s market price of around €34.8 per share, suggesting investors will be reluctant to tender.
UniCredit CEO Andrea Orcel has said he could “mildly” improve the terms if investor demand is strong.
Orcel has been pursuing Commerzbank since September 2024, hoping to turn the Italian bank into a dominant force in Germany, Europe’s largest economy. UniCredit already owns a 30% stake in it.
The German government, which holds 12% in Commerzbank, is strongly opposed to the deal. The bank’s management has rebuffed Orcel as well.
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UniCredit kept the premium on the offer low as it’s designed to push UniCredit’s holding just above 30% without immediately securing full control. Crossing the threshold would otherwise trigger a mandatory takeover bid.
If UniCredit’s offer doesn’t result in a controlling shareholding level, the firm will likely stay under that threshold for at least 12 months to preserve its shareholder payout commitments.
Orcel said on an analyst call Tuesday that he had withdrawn a share buyback application with the European Central Bank amid the Commerzbank offer. He said he would resubmit it if he did not win full control over the rival.
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The CEO also said on the call he’s “attentive to opportunities of consolidation” in the Italian banking market. He previously tried to buy domestic competitor Banco BPM SpA but dropped the bid last year amid opposition from the Italian government.
UniCredit’s offer document again spelled out how Orcel wants to improve Commerzbank’s profitability after a takeover. The focus would be on savings at the corporate centre and IT optimisation, which would contribute to an expected €1.1 billion in additional “annual pretax value".
The document also included previously disclosed proposals on how to boost Commerzbank’s performance if it remains independent. The measures, which include "redesigning" the international network, would bring about an estimated €0.8 billion in “pretax value", it said.
Commerzbank CEO Bettina Orlopp previously rejected the proposals.
UniCredit earlier on Tuesday posted a record quarterly profit. Net income in the three months through March increased 16% from a year earlier to €3.22 billion.
The bank also upgraded its full-year profit outlook to at least €11 billion and confirmed its 2028 targets.
Commerzbank is set to report first-quarter earnings on May 8.
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