Commerzbank AG dismissed UniCredit SpA’s €37bn ($43bn) takeover bid as too low and urged investors to spurn it, further ratcheting up the heat in the 19-month-long takeover saga.
UniCredit “does not offer an adequate premium to our shareholders,” Commerzbank Chief Executive Officer Bettina Orlopp said in a statement on Monday, reflecting the formal assessment by the bank’s management board and supervisory board.
Commerzbank is open to talks if UniCredit improves the offer and presents a strategy for the combined entity that “builds on the strengths” of its business model, it said. However, UniCredit’s current proposals rely on synergy estimates that are “neither robust nor convincing” and they would “weaken” the bank’s ability to serve German companies, it said.
UniCredit is offering 0.485 of its own shares for each one in its German rival, valuing the target at roughly €37bn at Friday’s close. Commerzbank’s market value was about €39bn. UniCredit CEO Andrea Orcel has floated the option of improving the bid if there’s strong investor take-up or talks with Commerzbank.
The Italian lender said in a statement following Commerzbank’s release on Monday that “we fundamentally disagree with many of the arguments put forward and find them to be without merit or substantiating data.” It added that a fuller response will be published “in due course.”
The exchange between the two banks escalates tensions that have been bubbling ever since Orcel started openly pursuing Commerzbank in September 2024 in an effort to expand operations in Europe’s largest economy. Orcel unveiled a formal takeover offer in March, which was submitted to Commerzbank investors earlier this month and runs through June 16.
Commerzbank has since repeatedly criticised UniCredit’s tactics and accused the Italian bank of seeking to talk down its valuation. It renewed that critique on Monday saying that any talks with UniCredit would require a relationship of trust. That has been “severely undermined” by the Italian lender’s “uncoordinated conduct and its repeatedly misleading communications,” it said.
The German government, which is Commerzbank’s second-largest investor with a shareholding of about 12%, is vehemently opposed to the deal.
Orlopp and Orcel held talks about the offer earlier this year but the meetings ended up in disagreement and ultimately deepened divisions between the two. While UniCredit has said that a takeover would improve Commerzbank’s profitability through substantial cost cuts, the German lender has dismissed the proposals as unrealistic and said they would cause revenue loss.
Commerzbank has also accused UniCredit of using “misleading” representations in the strategy proposals it has made for the German bank.
“UniCredit is inaccurately assessing the revenue losses, cost saving potential, and restructuring costs as well as the time required to implement its planned measures,” Commerzbank said in the release on Monday. “This applies in particular to the headcount reductions envisaged by UniCredit, the complex IT integration, and revenue losses arising from overlaps in the Corporate Clients business.”
The price offered by UniCredit has been below Commerzbank’s market value for some time and very few shares have been tendered so far.
UniCredit currently owns close to 27% in Commerzbank through direct shares and it controls another 12% of voting rights through derivatives, with most of those instruments only allowing for cash settlement, according to the latest regulatory filing.
Commerzbank had been widely expected to reject the offer. Shares in both firms largely maintained earlier losses after the release.
Commerzbank will hold its annual general meeting on May 20. Over the past five years, the participation rate at its AGMs has always been below 70% of the share capital.
