UniCredit, Italy’s second-largest bank, has increased its stake in Germany’s Commerzbank from 21% to around 28% as speculation grows of an attempted buyout.
Stake increased
UniCredit’s overall position now totals circa 28%, of which 9.5% was increased through a direct stake and circa 18.5% through derivative instruments, the Italian bank said in a statement released Wednesday. It had previously raised its stake in Commerzbank, also with the use of derivatives, to nearly 21%.
UniCredit’s average entry price for the entire position is below current trading levels.
It said it has submitted the necessary regulatory filings to acquire a stake in Commerzbank above 10% up to 29.9%. The authorization process is now activated, and interactions with authorities are ongoing.
The statement confirmed that the position is solely an investment and does not have any impact on the public exchange offer with its rival Banco BPM.
The Italian bank said the increase in its stake reinforces its view that “substantial value exists within Commerzbank that needs to be crystallized.”
BPM bid
UniCredit has been under pressure in Italy to improve its BPM bid, which stands at a 14% discount to the market price.
Announcing the BPM bid, UniCredit CEO Andrea Orcel said his bank could not afford to be side-lined in accelerating consolidation in its home market.
He said he was pausing expansion efforts in Germany until a new government was in place because of a rule that would force UniCredit to pay cash if it launched a full bid for Commerzbank within six months of acquiring at least 5%.
ECB approval
UniCredit has also sought European Central Bank (ECB) approval to reach a 29.9% stake in Commerzbank, just below the level that triggers a mandatory takeover offer.
The ECB authorization process can take up to 90 working days from when the central bank receives the documents, UnicCredit said, adding that the process is ongoing.
The ECB’s assessment is expected to take close to the entire period the supervisor has due to the complexity of the evaluation, Reuters reported.
