UniCredit vs. Commerzbank: Dispute Over Shares Reaches Bafin

The background to the dispute is the question of how UniCredit, by its own account, was able to secure almost twelve percent of the shares in the Frankfurt bank, even though exchanging them for UniCredit shares would be a loss-making proposition for Commerzbank shareholders financially. Commerzbank had pointed out on Wednesday of the previous week a "erheblichen Anstieg der Wertpapierleihe-Aktivitäten". It was "nicht auszuschließen, dass der erhebliche Anstieg der Wertpapierleihe-Aktivitäten mit dem Annahmeverhalten einzelner Banken und Parteien, die mit der Unicredit verbunden sind, in Zusammenhang steht".

UniCredit rejected this representation emphatically. "Behauptungen, dass die tatsächliche Zahl der eingelieferten Aktien niedriger sei, weil diese Aktien von UniCredit geliehen worden seien, sind falsch und entbehren jeder Grundlage", the bank stressed. "Eingelieferte Aktien sind eingelieferte Aktien und unwiderruflich gebunden."

Derivatives and Securities Lending at the Center

However, UniCredit itself had disclosed that it had entered into derivatives transactions with banks with which it wanted to hedge against price losses with Commerzbank shares. According to insiders, these are not backed by ordinary Commerzbank shares, but by Commerzbank shares tendered into the takeover offer. Commerzbank stated that, according to its data, only part of the tendered shares are "wirklich im Eigentum der andienenden Parteien".

In June, 11.86 percent of Commerzbank shares were tendered to UniCredit, according to the bank's own figures. In addition, there are the 26.8 percent of shares it already held directly beforehand. According to UniCredit, its direct stake in Commerzbank, including the shares tendered as part of the offer, is well above the 30 percent threshold.

In substance, the accusations go far beyond technical questions about securities lending. UniCredit stated that Commerzbank's negative comments had "lediglich den Zweck, von den Vorzügen der Transaktion und den erheblichen Vorteilen abzulenken, die ein Zusammenschluss von HypoVereinsbank und Commerzbank für Aktionäre, weitere Interessengruppen und Deutschland bringen könnte". UniCredit is also confident "dass dies die Umsetzung einer Strategie unterstützen würde, die die von UniCredit identifizierten strategischen Wertschöpfungsmöglichkeiten nutzt, die die Commerzbank insbesondere in Deutschland stärkt und transformiert".

Threat to the Management Board

UniCredit is indirectly threatening the Commerzbank management board with dismissing it via the supervisory board. "Sollte UniCredit auf der Hauptversammlung ausreichende Unterstützung durch Aktionäre erlangen, wäre sie in der Lage, sämtliche Anteilseignervertreter im Aufsichtsrat zu wählen, der seinerseits für die Bestellung des Vorstands zuständig wäre", UniCredit further stated. A simple majority at the annual general meeting would suffice for this, which is already within reach for UniCredit.

Involvement of Bafin

By involving Bafin, UniCredit is noticeably stepping up the tone. Commerzbank had voiced doubts about the plausibility of the high tender ratio in the previous week, citing unusual securities lending activities. UniCredit sees this as an attempt to undermine the integrity of the takeover procedure and is now demanding an official review by the regulator.

Bafin did not initially comment publicly on the request. Observers interpret the step as a sign that UniCredit intends to pursue the conflict with Commerzbank at the regulatory level as well, should no amicable solution be found.

Overall, the episode underscores the growing nervousness of both banks. While Commerzbank is fighting for its independence and questioning the tender balance sheet, UniCredit is simultaneously building up pressure on the management board and shareholders. The coming weeks – particularly the date of the ordinary annual general meeting – are likely to show whether the Milan-based bank can further expand its shares and its influence.

According to its own account, the Italian major bank now holds well over 30 percent of Commerzbank's shares, both through direct ownership and through tendered shares. This brings UniCredit closer to a threshold beyond which further regulatory and corporate steps become possible. Commerzbank has so far not commented on the new accusations, nor on UniCredit's involvement of Bafin.