Continuing its bold resistance to UniCredit’s 35 billion euro (up to nearly USD 50 billion) all-stock acquisition offer, German lender Commerzbank has written to its shareholders, asking them again to reject the Italian venture’s bid to buy shares.
The letter, signed by CEO Bettina Orlopp and being mailed to shareholders, said UniCredit’s offer isn’t high enough and that the Italian bank had not presented a “sound plan” that builds on the German bank’s strengths.
While maintaining that it published the figures to increase transparency, Commerzbank also said that institutional investors have tendered just somewhat more than 1% of shares in UniCredit’s takeover offer.
The two banks have been in a bitter battle for control for months, and UniCredit’s all-stock acquisition offer is currently ongoing.
“The shareholder structure remains largely unchanged. Of the 12.51% of tendered shares, institutional investors have tendered 1.29% of shares, retail investors 0.05%, and banks 11.17%,” Commerzbank said, while pressing up the attack on UniCredit.
UniCredit’s CEO Andrea Orcel, on the other hand, said that he and the Italian lender’s top leadership are expecting the European Central Bank (ECB) to declare the financial venture in control of Commerzbank, given how much it owned after its takeover offer.
“At the moment, it is a lot more probable that we end up with what the ECB would call control than not,” Orcel told the recently concluded annual Mediobanca CEO conference in Milan.
“Due to minority holding rules, merging its accounts with those of Commerzbank without majority ownership would cost UniCredit 40% more in terms of core capital. We never launched this offer to go to control. Now we are in a situation where we might,” Orcel added further.
As per UniCredit, it launched a voluntary exchange offer for Commerzbank shares on May 5; it simply wanted to nudge its 27% stake above the 30% mandatory takeover threshold, apart from being able to freely buy more on the market in 2027. The offer, which carried a very modest premium, concluded on June 16 with a 12.5% take-up, handing UniCredit 42.5% control of Germany’s Commerzbank.
“At this level, UniCredit will be able to determine the outcome of shareholder resolutions, prompting the ECB, which is reviewing the matter, to declare it in control of Commerzbank,” Orcel noted.
The CEO is also keen to preserve UniCredit’s capital reserves to keep up its payout policy and for consolidation in Italy.
The offer has been vehemently opposed by the Commerzbank and German government due to accusations and concerns over acceptance data and UniCredit’s use of derivatives. As per Commerzbank, the shares have been tendered by banks, not institutional investors, and in most cases, banks that were UniCredit’s swap counterparties.
Orcel, countering the allegations, said excluding passive investors (as they cannot sell their stakes), all institutional Commerzbank investors except five have either tendered or sold their shares.
“We confirm that institutional and retail investors have only contributed around 1% of the tendered shares, reflecting that the offer does not represent the value of Commerzbank as seen, amongst others, by independent market research,” he added.
Commerzbank hit back by reiterating its view that the take-up was not proof that the market liked the bid.