FRANKFURT/LONDON, Sept 11 (Askume) – It was late in the day in Europe on Tuesday and investor skepticism was growing. The German government’s efforts to bring Commerzbank shares to market (CBKG.DE) seemed a simple task but have stalled.
JPMorgan expects the deal to close soon and the bank will send an email update to investors, according to sources familiar with the deal . (GS.N) and Goldman Sachs (JPM.N)
But the news did not come until Wednesday morning.
In a surprise and rare move, all of the shares, worth about 700 million euros ($771.3 million), were acquired by a single buyer, with Goldman Sachs no longer involved in the sale.
UniCredit SA (CRDI.MI), led by Chief Executive Andrea Orcel, beat out other companies to acquire the full 4.5% stake.
Separately, the bank quietly bought a 4.5% stake in the open market, making UniCredit one of the biggest shareholders and opening the door to a potential deal with a commercial bank that hired Goldman Sachs as defense adviser.
Some German government officials said they were surprised by Auxerre’s move. But the Italian bank, which has excess capital and already owns German lender HVB, has long been rumored to be keen to take over Commerzbank if it found the right opportunity.European regulators have long favored the consolidation of unprofitable industries.
Berlin’s announcement last week that it wanted to sell its 16% stake in troubled Commerzbank appeared to offer Orser, the skilled M&A banker, an opportunity.
Mark Kelly, chief executive of MKP Advisors, said: “The way this is being described in the market, it is unlikely that UniCredit is involved in this, it is probably much better coordinated than it appears at first glance, and it is likely that this is a complex long-term story behind it.
UniCredit declined to comment for this article. Executives at JPMorgan and Goldman Sachs declined to comment on their role in the deal.
According to the term sheet, UniCredit paid a 4.8% premium to Tuesday’s closing price and spent about 700 million euros to buy the government’s shares. Another person, who was not authorized to speak publicly, said JPMorgan was bound to accept the best offer in the interest of a fair and transparent process.
Meanwhile, a third person said Goldman Sachs, another bookrunner on the sale, had to withdraw from the deal because of potential conflicts. It is now leading Commerzbank’s rescue.
After the news broke on Wednesday, Orser contacted Commerzbank management to explore possible merger talks, another person familiar with the matter told Askume.
UniCredit said it is seeking permission to buy more than a 9.9% stake in the commercial bank if it wishes.
Filippo Aloatti, head of finance (credit) at Federated Hermes, said: “The ball is now firmly in UniCredit’s court, with all eyes on whether it can increase its stake in Commerzbank to more than 9.9%.”
Other European banks are also considering their strategic options, including Deutsche Bank, which declined to comment on Wednesday.
Commerzbank didn’t waste much time. A board meeting was hastily called for Wednesday to discuss how to maintain the German bank’s independence and explore defense strategies against a potential takeover by UniCredit, one source said on condition of anonymity.
A government source said any share sales in Germany were likely to be put on hold as banks and the government now needed to assess the new situation. Union members also opposed the alliance because of concerns about large-scale job losses. Commerzbank shares rose 16.6% to close at 14.69 euros in Frankfurt, while UniCredit shares closed 0.2% higher in Milan.
(1 USD = 0.9075 EUR)
