Commerzbank is considering purchasing a medium-sized German bank as part of its strategy to fend off a possible takeover by Italy's UniCredit, they told Reuters three people familiar with the matter. The plans are still in their early stages and possible targets could include Hamburg Commercial Bank (Hcob) (controlled by Cerberus and JC Flowers) or the Oldenburgische Landesbank (owned by the Apollo fund), the sources said.
Commerzbank's decisions are significant because the bank has tried to develop a defense plan, without so far revealing anything other than that it was pursuing a standalone strategy. A purchase could make it more complicated for UniCredit the acquisition of Commerzbank, which is reportedly already busy integrating another bank. Alliances of this size are rare in the competitive German banking landscape, he notes Reuters. Ecosystem's staff is Unicredit title opened positive at 40,28 euros (+0,44%). Commerzbank shares are at 15,77 euros (+0,64%)
A possible acquisition has been discussed by Commerzbank management, the same two people said. Commerzbank said it was constantly monitoring inorganic growth opportunities, but declined to comment on any targets. Its CEO Bettina Orlopp said last week that Commerzbank was “holding itself ready for potential acquisitions.” Olb and Hcob, which both have around 32 billion euros in assets, declined to comment on any approach by Commerzbank.
After the blitz that in last September brought Andrea Orcel's group to 9% (21% if we consider the potential participation in derivatives), Commerzbank has gone on the defensive and, with advisors Goldman Sachs and UBS, is trying to define a plan. In addition to the plan buy back to push the stock higher, the German board is now targeting a mid-sized bank. It is unclear whether Commerzbank has the time or investor support to proceed with a domestic purchase, but management is weighing all options in an attempt to discourage UniCredit. If Commerzbank were to strike a deal before UniCredit had time to intervene, it could derail the rumored cross-border merger, which would be Europe's largest since the 2008 financial crisis.
mBank option dropped
According to financial sources, in recent weeks Commerz has also considered the sale of subsidiary mBank, a digital institution currently active on the Polish market. This option has been for the time being set aside top management and Orlopp herself. “We have no intention of selling mBank,” Commerzbank spokeswoman stressed, although members of the supervisory board are betting that a sale of mBank is still on the table.
