Deadline looms for UniCredit’s hostile bid for Commerzbank

MILAN: Tuesday marks the final day for UniCredit’s hostile and highly political takeover offer for Commerzbank, as Italy’s second-largest bank has its sights on an ambitious pan-European banking merger.

The Milan-based bank launched its bid valued at €35 billion (US$40.6 billion) in early May to gain control of its German rival and cement its status as a European heavyweight.

UniCredit’s offer officially ends Tuesday at 11.59pm, unless extended.

On Monday, the Italian bank hailed the fact that it had exceeded the 30% threshold it had set for this takeover bid.

The offer price is widely seen as too low, but it marks the latest move in UniCredit’s relentless pursuit of Commerzbank that has sparked fury from the lender and top German politicians.

If the offer succeeds and is approved by the European Central Bank, it should mainly allow UniCredit to gradually increase its stake in Commerzbank and merge it with its German subsidiary HypoVereinsbank.

UniCredit is proposing in particular to cut back Commerzbank’s international network, deemed too complex and inefficient, and refocus the bank on its activities in Germany.

German rejection

The offer has been rejected outright on the German side.

Chancellor Friedrich Merz said in May that the bid was destroying “trust” in Germany’s second‑largest private bank, known for financing the country’s prized network of small and midsize industrial companies.

Seeking to fend off the advances, Commerzbank’s CEO Bettina Orlopp unveiled a strategic plan to strengthen profitability through 2030, including job cuts to become leaner and more attractive to shareholders.

Beyond the disagreement over strategy and price, the two banks also clash over how UniCredit has managed to rally part of the shareholder base during the offer period.

Earlier this month, Commerzbank asked Germany’s financial markets regulator, BaFin, to examine “potentially misleading information provided by UniCredit” about its stake in the German bank.

UniCredit’s reporting of a gradually increasing uptake of its offer prompted accusations from Commerzbank that it was artificially inflating the figures.

UniCredit regularly reports the acceptance rate of its bid for Commerzbank: as of Monday it stood at 11.91%, on top of the 26.7% stake it had already acquired when it announced its takeover offer.

The Italian bank added to the sum another 13.19% of the capital held via cash‑settled derivatives, and 3.22% via equity‑settled derivatives.

Commerzbank has said it has no evidence of its own institutional investors accepting the offer, meaning it appears to be coming almost exclusively from banks and financial institutions connected to UniCredit.

On Friday, Commerzbank’s central works council mandated its head to file a legal complaint alleging market manipulation by unknown actors.

The Frankfurt prosecutor’s office said Monday that it had opened a preliminary investigation into “possible market manipulation”.

UniCredit, which said it too had appealed to BaFin, said Monday that it “continues to firmly reject the claims and insinuations concerning its disclosures and offer process”.

“At no point has UniCredit combined or conflated the different categories that must be disclosed under applicable regulations,” it said, accusing Commerzbank’s management of doing so “apparently with the aim of generating a misleading narrative”.

UniCredit has also asserted that by surpassing the 30% threshold of voting rights, it should be allowed to appoint all of the shareholder representatives to the supervisory board, where two representatives of the German state currently sit.

Orlopp has contested that position, pointing to an agreement with Berlin that guarantees Commerzbank the power to propose the state’s representatives to the board.