Commerzbank has turned down the takeover proposal by UniCredit, stepping up its opposition to the cross-border approach.
UniCredit is now Commerzbank’s biggest shareholder and earlier this month submitted an offer for Commerzbank stock that valued the lender at almost €39bn ($45.37bn), a level below the bank’s market price.
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In a statement on 18 May, Commerzbank said its supervisory and management boards “recommend that shareholders not accept UniCredit’s exchange offer”.
According to the bank, the proposal “does not reflect the fundamental value of Commerzbank” and “entails considerable risks”.
The German lender has for months objected to a merger and described UniCredit’s approach as “vague” with “no adequate premium”.
Until Monday, however, it had not issued its final view and advice to shareholders.
The bank said: “The conclusion is unambiguous: the implied offer value constitutes a significant discount compared to the long-term value creation potential of Commerzbank as well as to the current trading metrics.”
Commerzbank also said that since the offer was announced, its shares had finished above the implied offer value on every trading day, the bank noted in a statement.
The board of managing directors and supervisory board said UniCredit is “inaccurately assessing” likely revenue declines, possible cost savings, restructuring expenses and the time needed to carry out its proposed measures.
They said this was especially relevant to the planned job cuts, the complexity of integrating IT systems and revenue losses linked to overlaps in the Corporate Clients business.
They added that UniCredit’s synergy estimates were not robust or convincing and noted that UniCredit itself had described them as “speculative”.
Commerzbank CEO Bettina Orlopp said: “UniCredit’s takeover offer does not offer an adequate premium to our shareholders. What is described as a combination is in fact a restructuring proposal that would massively impact our proven and profitable business model.
“At Commerzbank, we have a clear and successful strategy, which offers an attractive growth case to our shareholders. That is the benchmark.”
Separately, Commerzbank recently announced plans to eliminate 3,000 jobs while setting stricter profit targets, part of its effort to support its position as a standalone lender during the takeover attempt by UniCredit.
