Commerzbank warns shareholders of risks from UniCredit takeover

Germany's Commerzbank warned shareholders against a takeover by Italian lender UniCredit at the company's annual general meeting in Wiesbaden. 

Anyone selling their shares to the major Italian bank – and at a loss, no less – is taking on considerable risks, Commerzbank’s leadership said on Wednesday.

In addition to the major hurdles to implementing UniCredit’s plans, shareholders, as future co-owners of the Milan-based bank, would also have to shoulder its internal problems, warned Commerzbank Supervisory Board Chairman Jens Weidmann at the Annual General Meeting in Wiesbaden. 

These, he said, include "increased exposure to Italian government bonds, a significantly higher ratio of non-performing loans and still significant business in Russia."

UniCredit is one of the largest foreign banks still operating in Russia.

The Italian lender, which already controls just under 30% of Commerzbank, submitted an offer for all its rival's shares at the beginning of May. Chief executive Andrea Orcel is offering 0.485 new UniCredit shares for every Commerzbank share. 

The Milan-based bank aims to acquire further shares by June 16 without having to make a mandatory bid, which would be significantly more expensive. The offer may be extended until July 3.

The German government, which still owns around 12% of Commerzbank, rejects a hostile takeover, as do the bank’s management, works council and staff.

"With this offer, UniCredit is attempting to take over Commerzbank at a price that does not adequately reflect the fundamental value and potential of our bank," said Commerzbank chief executive Bettina Orlopp at the shareholders’ meeting.  

"Nevertheless, and I would like to emphasize this very clearly, we remain open to talks - provided there is a genuine willingness to discuss the points we have raised."