Dividend, Defense, and Discount: Commerzbank's Crucial Week as UniCredit's Lowball Offer Tests Shareholder Loyalty

Shareholders face record dividend, buyback mandate, and board's formal rejection of UniCredit's discounted all-share bid as Commerzbank defends independence.

Shareholders in Commerzbank face a packed agenda this week as the lender’s annual general meeting collides with the final stretch of UniCredit’s hostile takeover bid. Three separate developments — a record dividend, the board’s long-awaited formal response to the Italian offer, and a fresh buyback mandate — will test whether investors back management’s push to remain independent.

The AGM convenes on Wednesday in Wiesbaden, and the timing is hardly accidental. Monday marks the ex-dividend date for the proposed €1.10 per share payout, up sharply from €0.65 last year, with payment due on 26 May. Combined with two share buyback programmes already completed, Commerzbank is returning roughly €2.7 billion to shareholders for the 2025 financial year. A new authorisation to repurchase up to 10% of the bank’s capital is also on the ballot.

That generous capital return is the board’s strongest rebuttal to UniCredit’s all-share offer of 0.485 of its own shares for each Commerzbank share. Valued at €31.07 based on UniCredit’s closing price on 4 May, the bid sits at a clear discount to Commerzbank’s latest quote of €36.15. The gap has done little to erode the stock’s longer-term momentum: over twelve months it has climbed 40.5%, though since January it has slipped 0.99%.

UniCredit already controls 29.99% of Commerzbank through direct holdings and financial instruments. The market’s scepticism about the offer is reflected in the technical picture — the relative strength index stands at 83.3, firmly in overbought territory, while the share price trades well above its 50-day moving average of €33.52.

The missing piece this week is the official statement under Section 27 of the German Securities Acquisition and Takeover Act (WpÜG), which both the management and supervisory boards are expected to publish shortly. Management has already signalled its opposition, arguing that the discussions to date have failed to demonstrate sufficient value creation compared with Commerzbank’s standalone strategy. Accepting the bid means swapping a controlling stake in a domestically anchored bank for UniCredit paper, leaving shareholders exposed to uncertainty over the eventual value of that consideration.

Operationally, the bank has ammunition for its defence. First-quarter operating profit jumped 11% to €1.358 billion, a record for the period. Net profit after minorities hit €913 million and commission income reached an all-time high of €1.102 billion. Looking ahead, the board targets a net profit of €5.9 billion and a return on tangible equity of 21% by the end of the decade.

Political backing adds another layer. The German government still holds just over 12% of Commerzbank, and Chancellor Friedrich Merz has described UniCredit’s approach as “hostile and aggressive”, flatly rejecting it. The extended acceptance period for the offer is expected to run until 3 July 2026, with UniCredit itself acknowledging that regulatory approvals mean any deal is unlikely to close before 2027.

This week’s WpÜG statement will be the first official signal of how deeply the board intends to dig in. For now, the message from Frankfurt is clear: the bank can reward shareholders handsomely on its own terms.