Three Days Before AGM, Commerzbank’s €2.7 Billion Shareholder Return Puts UniCredit Bid in the Shade

Commerzbank shareholders face AGM without board's formal rejection of UniCredit's offer, but record €2.7B capital returns and strong Q1 profits strengthen the case for independence.

The stage is set for a heated confrontation in Wiesbaden on 20 May, yet one crucial document remains absent from the takeover script. Commerzbank’s formal reasoned statement on UniCredit’s public offer, required under section 27 of the German Securities Acquisition and Takeover Act, has still not been published. Management’s opposition to the Milanese bank’s unsolicited bid is well known, but the official legal assessment will not land until the offer document has been fully scrutinised. That leaves shareholders heading into the annual general meeting without the board’s definitive written case for independence.

What they do have is a compelling financial case. The executive and supervisory boards propose a dividend of €1.10 per share for 2025, nearly double the €0.65 paid a year earlier and amounting to a total payout of roughly €1.2 billion. That is only half the story: two share buyback programmes completed between September 2025 and March 2026 have already returned another €1.5 billion to investors. Combined, Commerzbank is handing back around €2.7 billion for the past financial year — essentially its entire net profit before restructuring charges. Shareholders will also be asked to approve a fresh buyback mandate allowing the repurchase of up to 10% of the bank’s capital.

The generosity of that reward stands in stark contrast to what UniCredit is offering. On 5 May, the Italian lender published its formal offer document, proposing 0.485 new UniCredit shares for each Commerzbank share — an implied price of roughly €31.07 at the time. That was already almost 9% below the closing price that day. Since then the gap has widened dramatically. Commerzbank stock has recently changed hands at around €36.41, having touched €36.23 in earlier trading, putting it some 17% above the offer’s current value. The 12-month gain of 41% underscores that anyone who bet on Commerzbank’s standalone strategy has fared far better than any seller at the bid level.

Management’s core grievance is that the offer lacks any takeover premium. Shareholders would hand over control and future upside in exchange for paper whose underlying value barely matches what the market already assigns to the German bank. The board’s yet-to-be-published opinion is expected to hammer home that point, highlighting what it sees as vague execution plans and significant regulatory risks. UniCredit itself does not anticipate completing the transaction before 2027, given the inevitable antitrust and supervisory hurdles.

Operational figures from the first quarter provide further ammunition for the independence camp. Operating profit hit €1.358 billion, an 11% increase year-on-year and the best quarterly result in the bank’s history. Net income after taxes and minorities climbed to €913 million. Fee and commission income reached a record €1.102 billion. For the full year 2026, management is targeting net profit of at least €3.4 billion, while its “Momentum 2030” strategy aims for a return on tangible equity of 21% by the end of the decade, underpinned by €600 million in planned artificial intelligence investments.

Political backing adds another layer of complication for UniCredit. Chancellor Friedrich Merz has described the Italian bank’s approach as “hostile and aggressive” and rejects it “categorically”. The German government still holds just over 12% of Commerzbank’s shares, and its stance aligns firmly with the current management.

The acceptance period for the offer is expected to run until 3 July 2026. With the stock trading well north of the bid level and the AGM providing a platform for management to rally support, the voluntary tender looks unattractive to most holders. The next decisive moment will be the publication of the board’s formal statement — the document that will either sharpen the battle lines or, if it fails to convince, leave the door slightly ajar for Milan. For now, the numbers and the market verdict both side decisively with Frankfurt.