Market Piles Pressure on UniCredit as Commerzbank Shares Hold 18% Premium to Offer

Commerzbank shares trade 15% above UniCredit's €31 offer, reflecting doubts the hostile takeover will succeed. Analysts boost targets amid strong earnings and buyback plans.

Investors are delivering a clear verdict on UniCredit’s hostile advance: the Italian lender’s all-share offer, valued at roughly €31 per Commerzbank share at launch, is simply too low. Frankfurt-listed Commerzbank stock traded at €36.75 on Thursday, a gain of 1.55% on the day and a year-to-date advance of over 40%. The wide gap reflects deep skepticism that Andrea Orcel’s bid will succeed at current terms, and the market is effectively pricing in a higher value for Germany’s second-largest private bank.

The formal takeover process is now under way. UniCredit has submitted the offer document, triggering a requirement under the German Securities Acquisition and Takeover Act (WpÜG) for Commerzbank’s management board and supervisory board to issue a reasoned statement. That document, likely to land in the coming weeks, will officially bundle the bank’s opposition to the unsolicited bid. Until then, the board has urged shareholders not to take any action — a routine legal step that also serves as a tactical defense against the offer’s lowball valuation.

Analysts have added their own voice of caution. JPMorgan raised its price target from €36 to €37 on Thursday, maintaining a “Neutral” rating. The upgrade followed a strong first-quarter earnings report and the unveiling of Commerzbank’s updated “Momentum 2030” strategy. The U.S. bank lifted its profit estimates through 2028, yet stopped short of calling it a buy, citing the uncertainty of the takeover battle. Deutsche Bank Research was more bullish, lifting its target from €40 to €42 and sticking with a “Buy” recommendation, while RBC kept an “Outperform” rating and a €43 target.

At the heart of the standoff is the offer structure. UniCredit proposes swapping 0.485 of its own shares for each Commerzbank share, with no cash component. That leaves accepting shareholders fully exposed to the volatility and risk of the Italian bank’s stock. The current discount of more than 15% between Commerzbank’s market price and the offer value underscores the market’s view that the bid is inadequate. UniCredit now holds nearly 30% of Commerzbank’s shares and needs to cross that threshold to gain more flexibility, especially to offset potential dilution from Commerzbank’s planned share buybacks.

Technical indicators suggest the rapid run-up has left the stock stretched. The relative strength index stands at 83.3, well into overbought territory, and the share price is close to its 52-week high of €37.75. That may signal a near-term pullback, but the fundamental story — rising earnings, a beefed-up capital return — continues to support the independent case.

Commerzbank’s management is pressing its advantage with a generous payout strategy. At the annual general meeting in Wiesbaden on May 20, the board will propose a dividend of €1.10 per share, a sharp jump from last year’s €0.65. In addition, shareholders will vote on a new authorization to buy back up to 10% of the share capital, building on previously completed repurchases. For the full year 2025, the bank expects net profit of at least €3.4 billion, underpinning its argument that standalone value creation outstrips the current offer.

The acceptance period for UniCredit’s bid is expected to run until July 3, but any final completion is not anticipated before 2027 — largely due to pending regulatory approvals that remain independent of the offer’s outcome. Those long timelines, combined with Commerzbank’s strengthening financial profile and rising analyst targets, mean Orcel faces an uphill battle to win over skeptical investors. The coming WpÜG statement and the AGM should set the tone for the next chapter in this drawn-out saga.