By Elena Vardon
UniCredit raised its stake in Commerzbank to 28%, building on previous efforts to stock up its holding in its German rival and reigniting expectations it could launch a mandatory takeover offer for the lender.
The Italian bank said Wednesday that it acquired additional financial contracts tied to Commerzbank shares as it is in the process of getting the green light to raise its shareholding to up to 29.9%, just below the 30% threshold at which it would have to launch a mandatory takeover bid under German regulations.
UniCredit has been circling Commerzbank since September, when it flagged interest in a potential tie-up and disclosed a stake in the German group. Shortly after, it raised its shareholding further through the same mechanism of entering into financial contracts tied to Commerzbank shares.
Chief Executive Andrea Orcel has been trying to engineer a merger to add to Unicredit's existing presence in Germany and extend into Poland but political opposition from the government--which still owns a 12% stake in Commerzbank--and pending elections have delayed the process.
The stake is now made up of 9.5% direct ownership and around 18.5% through derivatives, it said.
"This move reinforces UniCredit's view that substantial value exists within Commerzbank that needs to be crystalized," it said in a statement.
Commerzbank, a key lender for small and medium-sized companies that has repeatedly backed its standalone strategy, didn't immediately respond to a request for comment. Its shares rose around 4% at market open in Europe.
"The position remains at this time solely an investment", UniCredit said. Its economic exposure is fully hedged, which protects it against potential risks while providing it flexibility and a range of strategic options, it said.
The bank last month made an unsolicited $10 billion-plus approach for Italian peer Banco BPM that was rebuffed. Late Tuesday, Banco BPM asked Italy's market regulator to take measures to protect its stakeholders.
UniCredit's position in Commerzbank doesn't affect the offer for Banco BPM, it said.
Write to Elena Vardon at elena.vardon@wsj.com
(END) Dow Jones Newswires
December 18, 2024 04:08 ET (09:08 GMT)
Copyright (c) 2024 Dow Jones & Company, Inc.
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