UniCredit is one step away from Commerz; the public offer reaches the finish line

There are still a few hours to go before the close of UniCredit’s public offer for Commerzbank. The supplementary acceptance period will in fact end at midnight tomorrow, although the final results will not be announced until Wednesday 8 July. It remains to be seen whether the final day of the tender offer will see a surge in acceptance compared with the first phase, which had attracted acceptances amounting to 12.51 per cent: a figure which, when added to the shares already held and outstanding derivatives, brings UniCredit’s total stake to 42.5 per cent. In effect, the bank based in Piazza Gae Aulenti is on the verge of gaining control of Commerz’s extraordinary general meeting, as noted in a statement issued yesterday by Mediobanca.

This could result in the appointment of 10 out of 20 representatives (including the chair, who has a double vote) to Commerz’s Supervisory Board, with the ultimate outcome being the appointment of the management. If this were the case, it would be easier for UniCredit to apply its ‘Unlocked’ strategy to Commerz, sharing the costs of the restructuring with minority shareholders, with implications for remuneration.

There will be time to complete the bid, just as it will take 3–6 months to obtain the ECB’s approval to exceed the 30 per cent threshold. During this period – note the analysts at Mediobanca, who confirm the Italian group’s position among the top five European banks with an ‘outperform’ recommendation and a target price of 92 euros – UniCredit will not be able to purchase Commerz shares.

Following the go-ahead from the Eurotower, UniCredit will be able to buy shares on the market without any obligations towards other shareholders. The situation is different for new total return swaps or bilateral purchases: within 12 months of the offer, at a higher price, a cash settlement would be triggered only for those who have accepted the offer. After 12 months, a new offer could be made without any particular restrictions. In the background, there is a risk of reduced liquidity in the share if Berlin and retail investors remain firm on their holdings.