Commerzbank Stock Sinks Below UniCredit Offer as Berlin Rejects Bid and Prosecutors Circle

Commerzbank shares dip under UniCredit's offer value as German government veto clashes with a criminal probe, complicating hostile takeover.

Commerzbank shares slipped under the implied value of UniCredit’s exchange offer for the first time on Wednesday, trading at €36.23 against a bid worth between €37.25 and €37.73 per share. But the discount is no standard arbitrage opening—it reflects a three-way collision between a hostile Italian suitor, a veto-wielding German government, and a criminal investigation that has thrown the takeover battle into uncharted legal territory.

The deadline for accepting UniCredit’s all-stock tender expires at midnight tonight, though a subsequent offering period running to July 3 is widely expected. The Italian lender will disclose final tender figures on July 8, when the true extent of shareholder support—and the likely next phase of the conflict—will become clear.

Berlin draws a red line, but can’t enforce it

Germany’s federal government, which holds a 12% stake in Commerzbank through its finance agency, formally rejected the bid on Tuesday. An interministerial steering committee criticised the offer for lacking an adequate premium to the current share price and lambasted UniCredit’s “aggressive approach”, citing the bank’s importance to the country’s Mittelstand business sector.

Behind the scenes, Commerzbank chief executive Bettina Orlopp had demanded a double-digit percentage mark-up—enough to push the implied value per share comfortably above €40—but UniCredit CEO Andrea Orcel refused to budge. The exchange ratio remains 0.485 UniCredit shares for each Commerzbank share.

Berlin’s veto is largely symbolic: with only 12%, the government lacks a blocking minority and cannot legally prevent a takeover. Orcel has openly threatened to oust the entire management and supervisory board via an extraordinary general meeting if Commerzbank refuses to abandon its independence strategy. Given typically low attendance at such meetings, UniCredit’s growing voting power could be sufficient to carry the vote.

Frankfurt prosecutors step in

The legal dimension escalated sharply this week. The Frankfurt public prosecutor’s office confirmed on Tuesday that it had opened preliminary investigations on suspicion of market manipulation, triggered by a criminal complaint filed by Commerzbank’s works council.

Commerzbank has accused UniCredit of providing misleading information to BaFin, the German financial regulator. The core allegation is that the roughly 11% to 12.4% of shares UniCredit claims to have been tendered did not come from independent market participants but were arranged through derivative-based side deals with partner banks. UniCredit denies the charge categorically.

The investigation adds a layer of uncertainty that no ordinary takeover target faces. Commerzbank’s strong fundamentals—including a dividend of €1.10 per share—risk being drowned out by the legal noise.

A stake that may be bigger than it looks

UniCredit already holds 26.77% of Commerzbank directly. Combined with shares it says have been tendered, it claims control of over 39% of voting rights. Some reports based on derivative positions put the Italian bank’s effective economic interest as high as 41.9% of capital, corresponding to 55.09% of voting rights.

Orlopp has publicly questioned that 39% figure, and BaFin is now scrutinising the calculation. If the regulator finds that the tendered shares were not freely delivered, the entire offer arithmetic could be thrown into doubt.

The stock’s technical floor has vanished

In a conventional takeover, the bid price acts as a floor for the stock. Not here. Commerzbank shares have fallen roughly 4.7% from their 52-week high of €38.15, reached on June 1. Over twelve months the stock has still gained 27%, but the recent decline reflects a market that is pricing in the risk of prolonged paralysis rather than a clean acquisition.

The criminal probe, the government’s political opposition, and the threat of a boardroom purge create a cocktail of uncertainty that complicates any straightforward valuation. Investors who buy today are betting not on a smooth deal closure but on the failure of the preliminary investigation, a clean bill of health from BaFin, and a stable transition at the top of the bank. That is a heavy wager for a stock already trading below the takeover price.

Orcel’s high-pressure strategy—squeezing both Berlin and the Commerzbank board simultaneously—could yet backfire if the legal proceedings reveal irregularities in the reported acceptance figures. Until the prosecutor’s office and BaFin deliver their verdicts, the bank’s share price is likely to remain trapped between the bid’s theoretical support and the real-world drag of an unprecedented regulatory and criminal stand-off.