UniCredit CEO sees Commerzbank bid as too expensive, slim chances of BPM deal
MILAN, June 11 (Reuters) - UniCredit (CRDI.MI), opens new tab CEO Andrea Orcel said on Wednesday he currently saw little scope to advance his acquisition strategy, given that Commerzbank (CBKG.DE), opens new tab had become too pricey and Italy was effectively blocking a takeover of Banco BPM (BAMI.MI), opens new tab.
Veteran investment banker Orcel arrived at UniCredit in 2021 vowing to use M&A to speed up growth, provided deals meet strict criteria that would allow him to retain the returns his shareholders have enjoyed thanks to high interest rates and tight cost control.
Having driven a seven-fold increase in UniCredit's share price, Orcel last year moved on Commerzbank and smaller domestic peer Banco BPM, sparking angry reactions in both Berlin and Rome.
On Tuesday, Germany's finance minister said a letter that Chancellor Friedrich Merz had written to Commerzbank staff to express opposition to UniCredit was "an important signal" about the government's stance.
Speaking to CNBC television in Berlin after attending a financial conference organised there by Goldman Sachs, Orcel said Commerzbank's share price had anyway risen excessively, making a bid an unattractive option.
"No, at this level, we would not see value for our investors [in an offer for Commerzbank]," he told CNBC. "We're very happy for the gain we've had on the 30% [stake] but we wouldn't see value for our investors," he said.
UniCredit has acquired 28% of Commerzbank and Orcel said it expected by the end of the month to complete the steps that allow it to convert into equity the two-thirds of the stake which UniCredit still owns as derivatives.
UniCredit would then decide whether to consolidate the stake and it would in that case want to "exercise the power" that comes with being the biggest shareholder. Orcel reiterated he had given himself until 2027 to take a final decision on the stake.
As for Banco BPM, Orcel said the chances of completing the takeover offer were no higher than 20%.
The conditions Rome has imposed to authorise the bid, using 'golden powers' it has to protect national security interests, are unclear and expose UniCredit to fines worth up to 20 billion euros, Orcel said.
"The probability is 20% or less depending on whether the government clarifies or does not clarify those topics," he said.
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