(Bloomberg) -- UniCredit SpA Chief Executive Officer Andrea Orcel dismissed the idea that the lender could move its headquarters to Germany if it ends up buying Commerzbank AG.
Orcel answered “no” when asked by an audience member if such a scenario is possible. He was speaking at an investor event hosted by JPMorgan on Friday.
“We’re proud of being in Milan,” Orcel said. “If we make the headquarters a topic, then a lot of other countries are going to come back and say, hang on a second,” he said.
UniCredit is considering acquiring Commerzbank after taking a major stake in the German rival. The deal is opposed by the German government and some observers have suggested that UniCredit could offer concessions including moving its headquarters to appease Berlin.
Orcel also said on Friday that a potential takeover would not reduce the amount of money he’s planning to return to UniCredit investors.
“If we do M&A, we will keep our payouts the same,” Orcel said. “We will strive to keep the dividend per share trajectory equal to what it would have been without M&A.”
Boosted by soaring profitability on the back of higher interest rates, UniCredit has ratcheted up the amount of money it pays out to investors. The Milan-based bank plans to return about the same amount of money to shareholders it paid last year, when it was €8.6 billion.
German Elections
Orcel also said that any potential takeover move on Commerzbank would only happen after the German elections.
“I do not think it is a good thing for us to take advantage of a period of vacuum elections to launch a bid,” he said, adding that he “tried to be very respectful of Germany, its institutions, their government” when buying a stake in Commerzbank.
The German government has repeatedly denounced the way UniCredit acquired the Commerzbank holding, with Finance Minister Joerg Kukies reaffirming his criticism at a separate event in Frankfurt on Friday.
The Italian lender used a government placement in September to buy 4.5% in Commerzbank. The German subsequently complained it wasn’t sufficiently aware of UniCredit’s intention while Orcel has said the Italian lender flagged its interest in advance.
Orcel on Friday also cited German rules that would require UniCredit to complement a potential voluntary exchange offer for Commerzbank shares with an alternative cash offer, as another reason to wait.
Any share offer would have to be complemented by an alternative cash offer in case the buyer has concluded cash transactions involving at least 5% of the shares in the six months preceding the offer, Jefferies analysts explained in a note last month.
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