Unicredit conquest Commerzbank just a few days after the German government has put up for sale its share of 16,49%. With atwo-move action, the bank led by CEO Andrea Orcel has purchased the 9% of the second largest German bank listed for a total value of around 1,5 billion: 4,49% was acquired in the context of an offer of accelerated book building conducted on behalf of the Federal Republic, while the remainder was purchased through transactions on the market.
But now Unicredit, as the bank explains in a note, "will present to the competent authorities, if and when necessary, the authorization requests to be able to possibly exceed the threshold of 9,9% stake in Commerzbank”. After all, an M&A move was expected from Unicredit, strong in its 10 billion excess capital. At Piazza Affari the Unicredit title 36,68 euro share, up 1,68%. Commerzbank shares at 14,62 euros, up 16,16%.
For that 4,49%, UniCredit paid the Berlin government 13,20 euros per Commerzbank share (higher than the daily closing price of 12,60 euros per share) for a total investment of 702 million euros, the German Financial Agency (Deutsche Finanzagentur) explained in a press release. The offer was significantly higher than all the others. This is the first step in the withdrawal from the capital of Germany's second largest bank, after the intervention to save it from bankruptcy during the financial crisis of 2008-2009. UniCredit now becomes the second largest shareholder of Commerzbank, with the German state still holding 12% and the asset manager BlackRock 7,2%.
Unicredit doubles Commerzbank's value
The deal has an impact on the capital strength index of the bank in Piazza Gae Aulenti, UniCredit's Cet1 ratio, of around 15 basis points and will not affect the dividend policy, the group warns. CEO Andrea Orcel indicated earlier this year that acquisitions could become more interesting for the group if the value of its shares continues to exceed that of competitors. The Milanese group's stock has risen by more than 44% this year to 59 billion in capitalization. The Italian bank's price to tangible book ratio is now in the area of 1,05 times compared to Commerzbank's value of around 0,5 times, so double.
“This first partial sale of the portfolio stake to the federal government heralds the completion of the successfully completed stabilization and thus the exit from Commerzbank,” says Eva Grunwald, director of Deutsche Finanzagentur, emphasizing that “Commerzbank has shown that it is once again firmly on its own feet.” Germany has committed to a 90-day lockup on further share sales of the bank.
The agreements between Unicredit and Commerzbank
UniCredit, the note from the institution continues, “expresses its support for the current management and supervisory boards of Commerzbank and the progress they have made in improving the bank’s performance”. UniCredit “will explore together with Commerzbank possible opportunities to create value for the stakeholders of both banks” and the institution specifies that “any decision regarding the participation will also depend on the consistency of such investment with UniCredit’s stringent financial parameters, as they have been clearly and consistently communicated to the market”.
