Am 10. September nachmittags ließ die Bundesregierung ihrer Ankündigung aus der vorigen Woche Taten folgen. Mithilfe der mandatierten US-Bank J.P. Morgan bot der Bund an diesem Dienstagnachmittag ein erstes Aktienpaket aus seinem Bestand institutionellen Investoren wie Versicherern und Pensionskassen an: Ein Anteil von 4,5 Prozent an der Commerzbank soll in einem ersten Schritt verkauft werden, „diskriminierungsfrei“, wie es die EU-Kommission verlangt. Denn sie hat die Stützung der Commerzbank durch den Staat vor 16 Jahren mit 18,2 Milliarden Euro als Beihilfe gewertet. Beim Rückzug bewegt sich der Bund daher auf rechtlich dünnem Eis.
A week ago, the federal government had left open whether it would reduce its 16.5 percent holding in Commerzbank by selling it off through repeated share sales on the stock exchange; or whether it would put together larger blocks of shares and solicit bids from institutional investors in over-the-counter trading in an “accelerated bookbuilding” process and then allocate the shares from the block to several investors with the highest bids.
“What bad timing”
Shortly after the federal government had decided to solicit bids and informed the public about it shortly before 6 p.m. on Tuesday, this news burst into the trading room: Manfred Knof, the 59-year-old CEO who has been in office since the beginning of 2021 and who restructured Commerzbank, is not seeking a second term for unspecified “personal reasons” and will only be available to the bank until the end of 2025. A participant who was involved in the federal government’s share sale through bookbuilding says: “We looked at each other and groaned: what bad timing. But then we said to ourselves: we’re going to go through with it now.”
It is not the only coincidence and the only surprise of the evening. The shares offered by the federal government are not being sold to various shareholders as planned. Instead, the package with 4.5 percent of all Commerzbank shares is going to a single bidder: Unicredit. The Italian bank has significantly outbid all other offers from institutional investors, announced the German Finance Agency, which oversees the federal government’s capital market business, just over an hour after midnight. As the news was making the rounds on the financial market on Wednesday morning, the surprise became even greater. Unicredit announced that the Italian bank owns not just 4.5 percent, but “around 9 percent” of Commerzbank.
Bypassing the 3 percent reporting threshold, Unicredit apparently bought additional Commerzbank shares on the stock exchange almost at the same time as buying the shares from the federal government. For the first half, it paid the federal government 13.20 euros per Commerzbank share. That is significantly more than the last stock exchange price on Tuesday of 12.60 euros.
Usually, larger blocks of shares can only be sold to investors at a discount. The investment banks commissioned by the federal government reportedly entered the market with a target price of 12.48 euros per Commerzbank share. Thanks to the great interest shown by Unicredit, the federal government is now taking not 663 million euros, but 702 million euros. That is about half of what the federal government has paid for Commerzbank over the years, a good 26 euros on average per share. So far, so gratifying.
But the federal government now has other questions: What should happen to the remaining 12 percent state share in Commerzbank now that Unicredit has grown to almost the same size as a shareholder with 9 percent? The federal government has committed itself not to sell any more Commerzbank shares for 90 days. But Unicredit has already applied to the financial regulator to be allowed to increase its share in Commerzbank to more than 9.9 percent to underline its interest in additional share packages. What is the attitude in Berlin to this? There is a long history behind this: until now, Unicredit was simply not wanted.
As financial circles close to the federal government report to the FAZ, representatives of the Italian bank signaled interest in buying the entire state share in Commerzbank to the Federal Ministry of Finance just last year – and were turned down. It is well known that Unicredit, to which Munich-based Hypo-Vereinsbank belongs, has wanted to buy Commerzbank from time to time. Investment bankers remember that they had already discussed a purchase of Commerzbank with Unicredit representatives before the financial crisis. In this respect, these takeover speculations are now becoming concrete, to the delight of the stock market. There, Commerzbank’s share price rose by a whopping 17 percent to 14.75 euros on Wednesday.
In a statement, however, Commerzbank reacted extremely cautiously to the new shareholder, with whom there are overlaps in the branch network and in the corporate customer business in Germany due to the strong Hypo-Vereinsbank in the south and north. The Verdi union therefore also rejects a takeover of Commerzbank by Unicredit and calls on the federal government to prevent this with its remaining share. Verdi fears job cuts and branch closures, after all, Unicredit has just converted Hypo-Vereinsbank from a stock corporation into a cheaper limited liability company (GmbH) at the end of 2023. “Federal Finance Minister Christian Lindner must now make a clear commitment to Germany as a business location and oppose the impending takeover of Commerzbank by Unicredit,” said Verdi boss Frank Werneke.
In fact, the proportions are clear: Unicredit is worth 60 billion euros on the stock market, Commerzbank 17 billion euros. However, Unicredit promised in its press release that it wanted to create added value for all interest groups in both banks through cooperation. Unicredit shares rose slightly at the beginning of Wednesday, and by midday the price was almost unchanged at 37 euros.
A purchase of Commerzbank would also have advantages for Unicredit, say stock analysts. From the perspective of the US bank KBW, for example, a complete purchase of Commerzbank by Unicredit makes strategic and financial sense. Commerzbank is trading at a greater discount than Unicredit’s book value, and Unicredit has a small market share by its standards in Germany, despite its subsidiary Hypo-Vereinsbank.
Unicredit CEO Andrea Orcel has been asked about possible takeovers for years. In March, he said at a conference that he was looking for uses that would generate at least an “internal rate of return” of 15 percent. If he could not find a suitable use, he would return his surplus capital to shareholders – as he has done on a large scale in recent years. “But I would be disappointed if it ended like this, because that would mean that I had not found a profitable way to invest it,” said Orcel. The Italian bank manager, who was responsible for investment banking at the Swiss bank UBS for many years before joining Unicredit almost three and a half years ago, estimated Unicredit’s surplus capital in March at 6 to 7 billion euros, taking into account the “Basel IV” capital adequacy rules.
This refers to the capital that can be used without falling below minimum financial reserves. In fact, it is often claimed that investments in other banks are no longer attractive for banks since the financial crisis because they have to be backed by expensive equity capital.
However, Unicredit has very extensive resources for transactions such as its entry into Commerzbank. This operation will reduce core equity (CET1) by just 0.15 percentage points from the most recent level of 16.2 percent, the bank said. The current dividend policy and the long-standing strategy of share buybacks will not be affected by this, it said.
In the first half of the year, Unicredit generated sales of 12.7 billion euros, of which a good 22 percent came from HVB. The German subsidiary also contributed roughly the same amount to the group’s net profit, which reached 7.3 billion euros. The second quarter of 2024 was the 14th quarter in a row in which Unicredit increased its profit. The bank makes its largest profit in Italy, followed by Germany. Unicredit is also represented in Austria and several Eastern European countries with Bank Austria. In Poland, where Commerzbank is represented with M-Bank, Unicredit has just expanded its presence by purchasing a bank.
The largest overlaps are in Germany, where Unicredit’s business has recently deteriorated somewhat. In the second quarter, HVB’s sales fell by 4.6 percent to 1.4 billion euros compared to the previous quarter. Net profit fell by 7.5 percent to 773 million euros in this period.
Unicredit is going from success to success on the stock market. Since the beginning of the year, the share price has risen by 45 percent; investors currently value the bank at 60 billion euros; in Italy, only its competitor Intesa Sanpaolo is worth more. Since Orcel was appointed as Unicredit’s CEO, the bank’s value on the stock market has more than tripled.
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