(Bloomberg) -- UniCredit SpA Chief Executive Officer Andrea Orcel, turning to a fresh takeover target, said that the probability of him buying Commerzbank AG is lower than previously expected.
The proposed acquisition of domestic rival Banco BPM SpA reduces “the need to close on the other side,” Orcel said on a conference call in a reference to Commerzbank. He said on a separate media call that he sees a lower likelihood for the deal.
Commerzbank shares slumped Monday after UniCredit announced the €10 billion ($10.6 billion) offer for Italian rival Banco BPM, prompting investors to reassess the odds of an all-out bid for the German bank.
UniCredit in September unveiled a large stake in Commerzbank, with Orcel saying he’s considering an acquisition. But his unsolicited approach triggered a harsh backlash from Berlin. Germany’s decision to call early elections has complicated his approach further.
The bid for Banco BPM “has no implications for our ongoing investment in Commerzbank,” Orcel said in a LinkedIn post. “Any further progress on that will take some time while we respect the electoral process in Germany.”
What Bloomberg Intelligence Says:
The proposed deal for Banco BPM may delay UniCredit’s pursuit of the German lender — which already looked to be a drawn-out affair given the hostile reception it faced from German politicians — but the all-share nature of the offer doesn’t reduce its firepower to continue its pursuit of Commerzbank.
-Philip Richards and Uzair Kundi, bank analysts
Commerzbank-UniCredit Deal Isn’t Over With Banco BPM Bid: React
Orcel seemed to address potential concerns about getting involved in too many deals simultaneously, saying on the analyst call that Commerzbank is just a financial investment at this point and “not a deal.” It won’t be a management distraction for as long as that’s the case, he said, while the Banco BPM offer “is a transaction” and will require more attention.
“Given the reception we have had in certain places, we need to be patient,” Orcel said. He reiterated UniCredit has “the flexibility to pull back” from the stake in Commerzbank.
German Finance Minister Joerg Kukies recently reaffirmed the government’s opposition to a deal.
“We have a very critical position,”, Kukies said in an interview with state broadcaster ARD on Sunday. “So I assume that he won’t” make a hostile offer, Kukies said.
--With assistance from Levin Stamm.
(Updates with Orcel comments in second paragraph.)
©2024 Bloomberg L.P.
