UniCredit has launched an offer to build its stake in Commerzbank above 30%, a key regulatory threshold if the lender is to launch a full takeover bid.
The Milan-headquartered UniCredit already holds a 28% stake in Commerzbank, comprising about 26.04% in shares with the rest in total return swaps.
The deal is expected to involve an offer exchange ratio of 0.485 shares of UniCredit per share of Commerzbank, implying a 30.80 euro price per Commerzbank share, or a 4% premium.
UniCredit.
UniCredit shares are down 10.5% year-to-date, while Commerzbank’s share price has fallen more than 18% since the start of the year.
Under German takeover regulations, a 30% stake requires a mandatory offer for the remaining shares. UniCredit’s bid is designed to overcome this 30% cliff-edge without reaching control.
UniCredit CEO Andrea Orcel said he does not expect the stake to go significantly above 30%. Taking its stake to 100% would eat up 200 basis points of the bank’s capital, Orcel added in comments reported by Reuters.
“A full takeover scenario is remote,” Orcel said.
Orcel told CNBC last June that Commerzbank’s share price then was too high for a merger deal.
The offer is expected to formally launch at the start of May, with UniCredit set to hold an Extraordinary General Meeting on May 4 to seek authorization for the related capital increase.
The German government holds about 12.72% of Commerzbank shares. BlackRock is the third biggest shareholder, with 5.73%, with Norges Bank Investment Management holding 3.14%.
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