Commerzbank’s Defence Campaign Intensifies as UniCredit’s All-Share Bid Leaves a 5% Discount on the Table

Commerzbank board urges shareholders to reject UniCredit’s €34.56 bid, citing valuation gap, potential 11,000 job cuts, and client risk. Stock trades at €36.06.

Frankfurt and Milan are heading for a showdown at Wednesday’s annual general meeting, where Commerzbank’s management will try to convince shareholders that staying independent is worth more than the paper UniCredit is offering. The board’s unanimous rejection of the Italian lender’s exchange offer rests on a simple arithmetic problem: the bid values each Commerzbank share at roughly €34.56, while the stock closed Monday at €36.27 and dipped slightly to €36.06 by Tuesday. Without a control premium – standard in European bank M&A – the gap is hard to defend.

Chief executive Bettina Orlopp has been blunt in her characterisation. Rather than a merger of equals, she describes the proposal as a “restructuring plan” that would shift risk from Milan onto Frankfurt’s balance sheet. The supervisory board, led by former Bundesbank president Jens Weidmann, backs that line. Weidmann argues UniCredit has overestimated the synergies and ignored potential revenue losses from client defections, particularly among the mid-sized corporate customers that are Commerzbank’s core franchise.

Those concerns are not just theoretical. Commerzbank’s internal analysis warns that integration could cost 7,000 to 11,000 full-time jobs in Germany, far more than the Italian group has acknowledged. The warning also flags UniCredit’s large holdings of Italian sovereign debt and its residual Russia exposure as latent threats to a combined group’s credit profile. On the customer side, a prolonged IT integration risks disrupting the Mittelstand relationships that Commerzbank has cultivated for decades.

To counter the offer, the board has rolled out “Momentum 2030”, a standalone plan targeting net profit of €5.9 billion by the end of the decade. The strategy relies on artificial intelligence to automate processes and cut headcount, combined with strict cost discipline. For the current financial year, management has proposed a dividend of €1.10 per share – a payout that underscores the gap between the company’s own valuation and the offer’s implied worth.

Analysts have lent some credibility to the defence. The median price target stands at €41.50, a level that would require the stock to climb another 15% from current levels. Technically, the surge that has driven the shares up nearly 42% over the past twelve months has pushed the relative strength index above 81, deep into overbought territory. That momentum, however, has not yet translated into acceptance of UniCredit’s paper.

Chief executive Andrea Orcel has nevertheless built a formidable position. Through direct holdings and derivatives, UniCredit now controls 38.87% of the voting rights – 26.77% in shares and another 12.10% through financial instruments. The exchange offer, launched on 5 May, has a first acceptance deadline of 16 June, with a possible extension to 3 July. So far, barely any free-float shareholders have tendered their stock.

The German government, which still holds a residual stake, has also made clear it has no intention of selling into the bid. That stance, combined with the board’s united front, sets the stage for a tense AGM on Wednesday 20 May (secondary source says 21 May, primary says 20 May – need to check. Primary says "am morgigen Mittwoch, den 20. Mai", secondary says "Am 21. Mai". Conflict: primary says 20 May, secondary says 21 May. Both are from different publication dates? Will preserve both? Better to use primary as most recent? Actually both articles likely written on different days. But we must not invent, so we need to handle conflict. Primary says "am morgigen Mittwoch, den 20. Mai" implying article published on Monday 18/19? Secondary says "Am 21. Mai". Since we cannot know which is correct, we can omit exact date? But rules say preserve all facts. Better to state "this week" or use one? I'll use "Wednesday" and not specify date to avoid conflict, but that's slightly inventing. Alternative: mention that the AGM is scheduled for mid-May, the day the management will defend its strategy. Since both agree it's Wednesday, and primary gives 20 May, secondary gives 21 May – likely typo in one. As a journalist, I'd check but for synthesis I'll state "this Wednesday" and avoid the date. However, rule says preserve exact dates. I'll choose the primary's date 20 May as it's the one from the primary article which is more recent? Actually both are from same context. I'll use "20 May" from primary and trust that. But secondary says 21 May. To be safe, I can say "the annual meeting later this week" – but that loses fact. I'll use the primary's date. Alternatively, I can note the discrepancy? No, we must not invent. I'll use the primary's date and ignore the secondary's date, as the primary is designated "primary_article". That seems acceptable. So: "Wednesday 20 May". Also note that primary says "morgigen Mittwoch" meaning article published Tuesday 19 May? That's fine.

Re-insert that.

Despite the board’s opposition, Orcel has not ruled out pushing for a full takeover. The Italian bank has already secured nearly 39% of voting rights through a combination of spot purchases and derivatives, giving it a powerful blocking minority at a minimum. Commerzbank’s management will use the AGM on Wednesday 20 May to press its case that the company is worth more on its own, and that shareholders who swap now are effectively selling at a discount.

The fight is far from settled. But with the offer trading at a discount to market, few investors have so far bitten – and the longer the gap persists, the harder it becomes for UniCredit to argue that its paper is a fair price for control.