(Bloomberg) -- Commerzbank AG disclosed that Jefferies Financial Group Inc. controls 5.33% of its voting rights, adding to a number of investment banks with financial instruments in the German lender.
Jefferies crossed the 5% threshold that requires disclosure on Oct. 18, according to a Commerzbank statement Friday that confirmed an earlier Bloomberg report.
Jefferies’ position was built up to hedge UniCredit SpA’s existing holdings in Commerzbank, Bloomberg reported yesterday. Milan-based UniCredit has built a 21% holding in Commerzbank, which is mostly in the form of derivatives, and said a full takeover is an option.
The Italian bank has also said that the majority of its economic exposure has been hedged “to provide it with full flexibility and optionality to either retain its shareholding, sell its participation with a floored downside, or increase the stake further.”
UniCredit has been working with Jefferies in recent days to buy additional protection for its Commerzbank holding through complex financial instruments that mitigate the risk of share price declines, people familiar with the matter have said.
UniCredit previously worked with Barclays Plc and Bank of America Corp. to help build up its Commerzbank stake in several stages, Bloomberg News reported earlier. The Italian lender has asked for regulatory permission from the European Central Bank to increase its stake to as much as 29.9%.
Commerzbank Chief Executive Officer Bettina Orlopp said on a panel in Washington D.C. on Friday that Europe needs to make progress on creating a single market for banking services before it can have cross-border deals.
(Updates with Commerzbank CEO comments in final paragraph.)
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