Unicadet Try buying again. Commerce Bank, But the German bank continues to build a wall. Still waiting for the marriage between the two banking companies, the German bank has announced the launch of a share buyback program. 600 million eurosImmediately after publication of quarterly results. Germany’s second-largest banking institution has received approval from the ECB and the German Monetary Agency to begin its third buyback of the year. And another launch is planned after that. 400 million
More than a simple move to pay back shareholders, the operation looks like a real strategy, an attempt to block UniCredit, making its potential acquisition more expensive. The Italian bank is still considering buying Commerzbank, but is setting a one-year deadline for the acquisition.
Buyback at Commerzbank
The purpose of the Commerzbank buyback is not only to increase the value of the shares, which are A 27 percent increase Since UniCredit entered the scene, but also to strengthen shareholder support against a possible advance by the Italian group. Recently, UniCredit acquired a 9% stake in Commerzbank, with an option to increase it to 21% through financial instruments; With a share buyback, however, Commerzbank makes it potentially more expensive. take over the enmity, Due to which its share prices increased. This complicates things for UniCredit, which has to justify a greater financial commitment to its investors.
Not only that: after the first tranche was approved, Commerzbank requested permission from the ECB and the German Monetary Agency for a second tranche, which could reach 400 million euros. Bettina Orlop, Commerzbank’s CEO, explained that the bank recognizes great growth potential with the aim of further expansion in the Mittelstand segment, particularly in the areas of asset and wealth management as well as lending.
There is no risk to stakeholders for UniCredit.
Meanwhile Andrea Orcel, Unicredit’s CEO also confirmed UniCredit’s interest in Commerzbank Group in a presentation to analysts of the results for September 30. The CEO revealed: “During the quarter we deployed some of our additional capital and made a strategic investment in Commerzbank, which may or may not lead to a full consolidation.”
In the report, UniCredit responded to the concerns raised by the principals. Stakeholder Regarding the possible merger with Commerzbank, their denial and greater capital consolidation compared to Commerzbank and limited exposure to Italian government bonds. Regarding the employment concerns, UniCredit clarified that, “Although industrial trends mean that some difficult decisions will be required, UniCredit intends to manage them constructively with workers’ representatives in Germany and other parts of the world.” Known for”. UniCredit then said that the merger would not jeopardize any of Commerzbank’s key stakeholders, as “all relevant decisions of UniCredit Germany are made in Germany.”
The time to buy is still a long way off, but Orcel has set a deadline.
But for Andrea Orcel, the UniCredit-Commerzbank operation “It’s going to be a long road” And it won’t come to a conclusion anytime soon. “You hear a lot of speculation about what’s going to happen tomorrow, but the road will be long because there’s a long regulatory period, because Commerce Bank has to go through realizing what it wants to do and the moment. Because they believe they can go it alone,” he said.
Additionally, Orsel pointed out that elections in Germany and other factors play a role in making the goal slightly off, thus refusing to jump to conclusions. “We will only do this operation if it doesn’t reduce returns as expected by our investors, in fact it should significantly improve them, otherwise it doesn’t make sense for us either,” he told CNBC. He emphasized this in an interview.
However, he added, “At a certain point it has a limit”. Orcel explained that UniCredit cannot remain the only investor without deciding whether to enter or exit the operation entirely, but emphasized that “I do not see this decision being made. A year ago nowIn the meantime, the bank will continue to evaluate its options.
And “no offers on the table” for Orlop.
But in the meantime Bettina Orlopp doesn’t seem to want to see UniCredit. During a conference call with financial analysts, he said the bank is focused on implementing its strategy as an independent entity, despite the recent addition of UniCredit to its shareholders. Orlop explained that, at that time, “There’s nothing on the table.” In terms of offers, he added that the only discussions that have taken place so far have been with investors.
He also stressed that handling the current situation, including the new shareholder structure, requires attention, but that the priority is the implementation of an autonomous strategy. “We have not received any offers,” he reiterated, adding that so far we have only had exchanges between investors. “We are focused on executing our strategy and creating value, which makes a lot of sense to me,” concluded Orlop.
Additionally, UniCredit’s approach to its bank is “not what you would normally expect if you really wanted to do it in a friendly way.” Orlop said he would remain focused on Commerzbank’s strategy, which is having “a lot of success”, while he waits for UniCredit to decide whether to launch a takeover bid.
