Commerzbank Stands Firm: 99.9% Back Dividend and Buybacks as UniCredit's Derivative Control Reaches 38.9%

Commerzbank shareholders approve dividend with 99.88% support, reject UniCredit's inadequate takeover offer as bank posts strong Q1 results and raises outlook.

Shareholders of Commerzbank have thrown their weight behind the board’s defence strategy, approving the €1.10 dividend with 99.88% support and granting management discharge with near-unanimous votes of up to 99.64%. The strong show of confidence comes at a tense moment, with Milan-based UniCredit holding a commanding 38.87% stake in the German lender through a combination of direct equity and derivatives — even as its formal takeover offer has failed to win over more than a sliver of shareholders.

The Italian bank’s grip is built on two layers. Direct holdings account for 26.77%, while another 12.10% is controlled via total return swaps. Analysts point out that this concentration of voting power could, in practice, swing a shareholder meeting if attendance is low or the remaining investors are fragmented. Yet the tender offer itself has drawn a meagre response: acceptance rates initially stood at 0.02%, later rising to around 1.1%. UniCredit has already extended the deadline to July 3.

The sticking point is price. UniCredit is offering 0.485 of its own shares for each Commerzbank share, pegging the consideration to the statutory minimum. Commerzbank’s management publicly rejects the valuation as inadequate and argues that the bank’s independent “Momentum 2030” strategy will deliver more value than a tie-up on these terms.

The numbers underpin that case. In the first quarter, operating profit surged 11% to €1.4 billion, and net profit rose 9% to €913 million. Net interest income held steady at €2 billion, while commission income climbed 9% to €1.1 billion. On the back of that performance, management lifted its full-year outlook, now targeting net profit of at least €3.4 billion, up from a previous floor of €3.2 billion.

Analysts are taking notice. Barclays reaffirmed its “Overweight” rating and €42 price target, with analyst Flora Bocahut highlighting a mechanism that ties the implied offer value directly to UniCredit’s share price: if the Italian bank’s stock moves toward €80, the offer’s worth would approach Barclays’ target. AlphaValue/Baader Europe also upgraded earnings projections following Commerzbank’s brighter guidance. The median independent price target stands at around €41.50.

UniCredit itself is hardly standing still. The Italian giant posted a record first-quarter net profit of €3.2 billion, up 16.1% year-on-year, and a return on tangible equity of 25.8%. Its CET1 ratio of 14.2% provides ample capital firepower, and the bank raised its full-year net profit guidance to at least €11 billion. Even so, insiders say UniCredit currently has no plans to sweeten the offer.

Commerzbank shares closed Friday at €36.94, up 0.71%, and have gained 39.24% over the past twelve months. The 50-day moving average stands at €34.59, leaving the stock 6.7% above that level. The relative strength index has reached 72.5, signalling overbought conditions that warrant short-term caution.

The boardroom battle also threw up a side note: former CEO Manfred Knof will see his variable compensation for 2024 cut by 30%, following an undisclosed meeting with UniCredit boss Andrea Orcel at Knof’s home last September. Supervisory board chairman Jens Weidmann said the committee found a breach of duty in Knof’s failure to inform the full board.

The next few weeks will be pivotal. Commerzbank is set to appear at a Goldman Sachs investor conference on June 4, the extended offer deadline falls on July 3, and second-quarter results are due August 6. With acceptance so low, UniCredit faces a clear choice: raise the price, intensify the derivative squeeze, or walk away.