UniCredit CEO says Commerzbank currently too expensive for takeover offer

UniCredit CEO Andrea Orcel connected Wednesday told CNBC that the stock terms of imaginable takeover people Commerzbank is presently excessively prohibitively costly for a merger deal.

UniCredit has built a astonishment involvement successful Commerzbank of 28% since September done derivatives and has the European Central Bank's authorization to clasp up to 29.9% successful the lender.

When asked by CNBC's Annette Weisbach whether the Italian slope would proceed with an acquisition connection astatine premium to Commerzbank's existent stock value, Orcel said, "At this [share] level, we would not spot worth for our investors. Actually, we would not, we are precise blessed for the summation we've had connected the 30[% stake], but we wouldn't spot worth for our investors."

Shares of the German bank, which has battled the specter of a takeover since September, person surged 76% successful the twelvemonth to date, benefitting from a broader rally of German equities pursuing Berlin's pivot to unbend immoderate fiscal rules and facilitate higher defence walk earlier this year.

Orcel stressed that UniCredit is presently "far away" from a merger bid with Commerzbank and would archetypal question a "constructive solution" to absorption from the German government.

"Secondly, successful our sentiment the stock terms has gone good beyond the fundamentals. There is simply a batch of enactment which is directed astatine keeping the stock terms astatine higher level than you spot each day, but we're patient," Orcel said.

CNBC has reached retired to Commerzbank for comment. The German slope posted better-than-expected results successful the archetypal quarter, erstwhile nett net surged by an yearly 29%.

Orcel insisted that his slope was initially invited to bid connected Commerzbank — yet UniCredit's play has been met with continuous absorption from some the German lender and the Berlin administration, nether some the erstwhile conjugation of Olaf Scholz and the existent authorities of Friedrich Merz.

Most recently, successful a Yandex-translated letter addressing Commerzbank staff, Merz said that "an uncoordinated and an unfriendly attack specified arsenic that of UniCredit is unacceptable," adding that the Berlin medication is "relying connected a beardown and autarkic Commerzbank."

Since the extremity of past year, UniCredit has been divided betwixt 2 imaginable hostile acquisition fronts, besides facing absorption for its simultaneous takeover connection for Italy's Banco BPM. When asked astir imaginable intentions to make a sprawling empire crossed the European banking sector, Orcel likened UniCredit to the "private solution" to a European banking union.

Yet the bank's courtship of its home adjacent has besides been mired successful hurdles. Italian authorities person granted a one-month suspension to the bid astatine the behest of UniCredit, which has cited the request to respond to Rome's usage of its "golden powers" successful this transaction. Such powers let the authorities to intervene successful definite transactions connected nationalist information concerns.

Italian and European regulators person peculiarly advocated for UniCredit's withdrawal from Russia, which remains nether wide-branching European fiscal sanctions for its warfare successful Ukraine. Orcel connected Wednesday stressed the opacity surrounding the government's expectations implicit UniCredit's engagement successful Russia.

"There is simply a statement connected definitions. There is simply a statement connected what does it mean [to] cease enactment successful Russia, for example. In our opinion, we person ceased. We person not fixed immoderate caller loans since [20]21," helium said.

The deficiency of clarity could permission UniCredit exposed to exorbitant penalties of astir 20 cardinal euros, Orcel noted — casting a shadiness implicit the entreaty of the Banco BPM pursuit.

"This is simply a hazard we cannot take. So if the authorities clarify, oregon if we clarify with the authorities those [requirements] and they are arsenic we deliberation they are, I deliberation determination is simply a bully probability [we] volition proceed [the Banco BPM takeover process]. If we bash not scope that, past we volition propulsion backmost and determination on," helium said.