Germany's finance agency rejected UniCredit's takeover offer for the government's 12% stake in Commerzbank on Tuesday, citing a low price that does not include an appropriate premium on Commerzbank's current share price. The agency also referenced concerns over what it described as the Italian bank's aggressive approach in pursuing the transaction. Germany acquired its Commerzbank stake after the 2008 global financial crisis and has opposed UniCredit's campaign to combine with the German lender, with the rejection coming as UniCredit's initial offer period winds down. The finance agency stated that accepting the offer was not viable from a financial standpoint and emphasized support for Commerzbank's independence and role in financing German medium-sized companies and Frankfurt's financial sector.
Germany Finance Agency Cites Lack of Premium in Rejection Statement
The government's finance agency said accepting the offer was not viable from a financial standpoint because the proposal did not include an appropriate premium to Commerzbank's current share price. "Accepting the offer was already not an option from a financial point of view, as it does not include an appropriate premium on the current share price of Commerzbank's shares," the agency said. The statement hardens Berlin's position and gives Commerzbank political cover as it resists UniCredit's approach. The finance agency said it supports Commerzbank's independence and pointed to the bank's role in financing German medium-sized companies. It also described Commerzbank as an integral player in Frankfurt, Germany's main financial hub. "Both must continue to be ensured in the future," the agency said. Germany holds a 12% stake in Commerzbank, acquired after the 2008 global financial crisis, and that stake creates a strategic obstacle because it gives Berlin influence inside Commerzbank's supervisory structure.
Commerzbank Shares Trade Below UniCredit's Implied Offer Value
Commerzbank shares slipped below the price implied by UniCredit's offer on Tuesday after trading consistently above that level since the bid was launched. Commerzbank shares were trading at €36.53 by 0812 GMT, while UniCredit shares were at €76.97. With an exchange ratio of 0.485 new UniCredit shares for each Commerzbank share tendered, UniCredit's offer valued Commerzbank at €37.33 per share. The share-price movement shows the market reassessing the probability of a successful transaction. When a target trades above the implied offer price, the market is usually pricing in either a higher bid or strong takeover momentum. When it falls below the offer value, that confidence weakens.
Frankfurt Prosecutors Open Preliminary Market Manipulation Investigation
Frankfurt prosecutors confirmed that they had opened a preliminary investigation into possible market manipulation related to the offer, though they did not provide details. The investigation follows a criminal complaint filed by Commerzbank's workers' council. The employee group had told staff it would file a complaint against unspecified persons amid questions about UniCredit's acquisition of Commerzbank shares at a below-market rate. UniCredit said it was aware of the matter and described the prosecutors' response as routine when such complaints are filed.
UniCredit Offer Extends 15 Days from June 20
The initial offer ends Tuesday and will extend for a further 15 days from June 20. Berlin's rejection does not fully block UniCredit from gaining control of Commerzbank, as the Italian lender's offer remains active as the process moves into an additional window. The government's 12% stake creates a strategic obstacle because it gives Berlin influence inside Commerzbank's supervisory structure, where the supervisory board appoints management and helps oversee strategy.
FAQ
Why did Germany reject UniCredit's offer for Commerzbank shares?
Germany's finance agency rejected the offer because it does not include an appropriate premium on Commerzbank's current share price. The agency also cited concerns over what it described as UniCredit's aggressive approach and stated that accepting the offer was not viable from a financial standpoint.
What is the exchange ratio and implied value of UniCredit's offer?
UniCredit's offer has an exchange ratio of 0.485 new UniCredit shares for each Commerzbank share tendered. With UniCredit shares trading at €76.97 by 0812 GMT on Tuesday, the offer valued Commerzbank at €37.33 per share, while Commerzbank shares were trading at €36.53 at that time.
What investigation did Frankfurt prosecutors open related to the offer?
Frankfurt prosecutors confirmed they opened a preliminary investigation into possible market manipulation related to UniCredit's offer. The investigation follows a criminal complaint filed by Commerzbank's workers' council amid questions about UniCredit's acquisition of Commerzbank shares at a below-market rate.
