Germany formally rejects UniCredit's Commerzbank takeover bid, citing low premium and aggressive tactics

Government rejection

Germany's finance agency announced on Tuesday that it would not tender its 12% stake in Commerzbank into UniCredit's offer, formally rejecting the bid on the final day of the initial acceptance period. The interministerial steering committee responsible for the state holding determined that acceptance was economically out of the question because the offer did not provide an adequate premium relative to Commerzbank's current market price.

Accepting the offer was already not an option from a financial point of view, as it does not include an appropriate premium on the current share price of Commerzbank's shares.

The agency also voiced support for the independence of Germany's second-largest private bank and rejected the "aggressive approach" of the Italian acquirer. It added that Commerzbank plays a critical role in funding the German economy and the Mittelstand, the small-to-medium-sized enterprises, and is an integral part of Frankfurt's financial centre.

Offer mechanics and market reaction

UniCredit's voluntary exchange offer, launched on May 5, offers 0.485 own shares for each Commerzbank share. By Tuesday morning, with UniCredit shares trading near €76.80, that equated to roughly €37.25–37.33 per Commerzbank share. Commerzbank's stock, however, fell to €36.60 for the first time since the offer began, dipping below the implied offer value and suddenly making the bid economically attractive to private shareholders. The initial acceptance period ends today, but investors have an additional two-week window until July 3 to tender their shares, raising the prospect of a snowball effect as liquidity concerns grow.

Escalating words and control threats

UniCredit already directly holds 26.77% of Commerzbank and has said it has acquired another 11% via the offer, potentially giving it 38% and the ability to dominate a shareholder meeting. On Monday, the Italian bank warned it could use that majority to replace supervisory board members and ultimately the management board.

Commerzbank CEO Bettina Orlopp pushed back, reminding that as long as the government retains its stake, it has the right to send two supervisory board members to the bank. The German government did not address this point in its Tuesday statement.

The actual number of shares tendered is lower because some were loaned by friend banks and not offered by independent shareholders.

The Commerzbank management and supervisory board have recommended shareholders reject the offer outright. In Frankfurt, market participants are now watching closely to see whether the drop below the offer price triggers a wave of late tenders.

Timeline of the bid