Jens Weidmann, supervisory board chair of Germany’s Commerzbank, the potential acquisition of Italian giant UniCredit, has called for a review of the European country’s takeover rules, saying the Andrea Orcel-led venture was able to secure control of the lender without offering shareholders an adequate premium.
Weidmann was quoted as telling German newspaper Sueddeutsche Zeitung that UniCredit’s approach raised questions because it had been able to obtain a majority despite making what he described as a financially unattractive offer.
“Of the roughly 73% of Commerzbank shares that could have been tendered to UniCredit, fewer than 18% were tendered,” Weidmann said.
“Institutional and retail investors accounted for less than 3 percentage points, with the remainder coming from banks linked to UniCredit,” the supervisory board chair added further.
“UniCredit was thus able to achieve a majority with a financially unattractive offer without paying an appropriate control premium. That raises questions about takeover law in Germany, which lawmakers may want to examine,” Weidmann told the German daily.
UniCredit’s offer period has ended, but the deal is not yet fully settled, as regulatory approvals are still required before the Italian lender goes ahead with the possession of the tendered shares.
Commerzbank’s spirited two-year campaign against the UniCredit takeover faded in July as the Italian lender gradually accumulated a stake of 48%, more than enough to determine the German bank’s shareholder resolutions.
Weidmann has also urged the German government to retain its Commerzbank stake for now, despite the holding having originated in a rescue package during the 2008 global financial crisis.
“The stake was part of a rescue measure, so the federal government should eventually withdraw. But in the current phase, it makes sense for the government to remain a shareholder in order to actively represent the interests of Germany as a business location,” Weidmann concluded.
Commerzbank, which registered stronger-than-expected second-quarter earnings by reporting a 94% year-on-year jump in net profit to 898 million euro, has already begun talks with UniCredit over the potential takeover.
Chief executive Bettina Orlopp, in the first week of August, said, “We have started talks on this, which is in the genuine interest of both UniCredit and Commerzbank, as we are both determined to create value for our shareholders, clients and employees. I’m optimistic that, step by step, we can find common ground on governance and also on the business model.”