Germany blocks UniCredit bid for Commerzbank, shares surge

Germany, a 12% shareholder in Commerzbank, has rejected the hostile public exchange offer (OPS) launched by UniCredit, choosing to preserve the German bank's independence and denouncing the Italian group's approach as "aggressive". The decision was announced by the German Finance Agency (Finanzagentur), which manages the state's stake. The agency stated that accepting the offer is "economically out of the question" as it includes no adequate premium over Commerzbank's current share price.

The deal is politically sensitive in Germany, where the federal government remains the second-largest shareholder in the Frankfurt-based bank, a stake inherited from the 2008 financial crisis. Beyond financial considerations, Berlin emphasizes the strategic implications. Commerzbank "plays a key role in financing the German economy and the Mittelstand, the backbone of small and medium-sized exporting companies, and is a major employer and a crucial pillar of the Frankfurt financial centre", which the government intends to preserve, the statement reads.

German business daily Handelsblatt reported that as recently as Monday, UniCredit threatened to replace Commerzbank's supervisory and management boards if it secured sufficient shareholder support. The bank then involved the financial watchdog Bafin, accusing UniCredit of relying on shares from banks with commercial ties via derivatives rather than independent shareholders. UniCredit has firmly rejected these criticisms and proposed slimming down Commerzbank's international network to refocus on Germany.

UniCredit said it has surpassed the 30% threshold set for the OPS, having launched the offer when it already held almost 27% of Commerzbank's capital. Meanwhile, the Frankfurt public prosecutor's office confirmed it has opened preliminary investigations into suspected market manipulation related to the OPS, following a criminal complaint.

Market reaction: UniCredit shares posted one of the strongest gains on the FTSE Mib, rising 3.71% to €77.34 despite the German government's rejection and its decision not to tender its shares. On Tuesday June 16 afternoon, UniCredit will publish the latest daily acceptance level, followed by final figures for the first offer period on Friday June 19. A supplementary period runs from June 20 to July 3, allowing shareholders to change their minds. Final figures will be published on July 8. Acceptances had reached 11.91% of capital. Total potential exposure, including derivatives, stands at 55.09% of capital (57.47% of voting rights). Looking only at physical shares and OPS acceptances, the stake is 38.68%; adding a physically settled derivative, it rises to 41.9%.