Commerzbank is rejecting the latest takeover offer from Italy's UniCredit as "not adequate," the major German banking group said in Frankfurt on Monday, reported dpa.
"UniCredit is not offering Commerzbank shareholders an adequate premium and has not presented a comprehensible and robust strategic plan for a merger," the management and supervisory boards said in a joint statement.
"UniCredit’s plan is vague and entails considerable risks," the statement said. The boards charged that UniCredit was underestimating earnings losses, overestimating synergies and assuming an "unrealistic implementation timeline."
This particularly affected the job cuts planned by UniCredit, the complex IT integration and earnings losses from overlaps in corporate client business.
“UniCredit’s takeover offer does not offer an adequate premium to our shareholders," said Commerzbank chief executive Bettina Orlopp in a statement.
The management board and supervisory board are advising Commerzbank shareholders not to accept the share exchange offer.
Both groups said they were convinced that implementing the latest strategy independently, with higher profit targets, would create more value. Shareholders who remain invested would benefit.
Orlopp said although UniCredit has described its offer as a merger, it "is in fact a restructuring proposal that would massively impact our proven and profitable business model."
Supervisory board chairman Jens Weidmann added that UniCredit's "speculative proposals" jeopardized Commerzbank's customer relationships as well as employee motivation.
UniCredit secures access to more shares
In the meantime, UniCredit secured the purchase price for further stakes in Commerzbank.
According to information released on Monday, the Italians held 26.77% of Commerzbank shares and had access to a further 3.22% via financial instruments.
At a combined 29.99%, they thus remained just below the 30% threshold.
Overall, however, UniCredit is now reporting an increase in voting rights from 32.64% to 38.87%. This includes purchase price hedges for 8.88% of the shares.
Takeover poker intensifies
UniCredit, based in Milan, had submitted a voluntary offer for all Commerzbank shares at the beginning of May.
It is offering 0.485 new UniCredit shares for each Commerzbank share in a bid to collect further shares until June 16 without having to submit a mandatory offer, which would be significantly more expensive.
The offer can be extended until July 3.
Commerzbank criticized the implied offer saying its value showed a significant discount to the long-term value creation potential and the current price.
"Since the announcement of the offer, the Commerzbank share has closed above the implied offer value on every single trading day," the statement said.
UniCredit is already active in Germany through HypoVereinsbank (HVB) and expects multi-billion euro savings if it takes over Commerzbank.
Commerzbank views UniCredit's approach as hostile and is receiving support from the German government, which holds just over 12% of Commerzbank shares.
The bank wants to convince its shareholders of an independent course with ambitious profit and return targets through to 2030.
Commerzbank recently announced plans to cut around 3,000 jobs.
- Commerzbank
- UniCredit
- Takeover bid
- Rejected
Source: www.dailyfinland.fi
