CONTACT US

For any general inquiries, please fill in the following contact form:

SUBMIT

Commerzbank hires advisers as takeover interest builds

Commerzbank hires advisers as takeover interest builds

By in London, in Frankfurt and in Milan

German lender is working with Goldman Sachs and Rothschild as European rivals circle

Commerzbank, Germany’s second-largest listed lender, has drafted in financial advisers as it braces for potential takeover bids from European rivals including BNP Paribas.

The Frankfurt-based bank is working with Goldman Sachs and Rothschild in analysing possible M&A scenarios, said multiple people following the situation.

One of these people added that the banks are not strictly preparing a defence strategy against a takeover bid but also are advising Commerzbank on its options.

Despite its past troubles, Commerzbank is attractive to larger banking rivals because it is among the most important lenders to the German Mittelstand, the dense network of small and medium-sized companies that form the economic backbone of Europe’s largest economy.

A takeover of the lender, which has a stock market value of just over €14bn, would be the biggest deal in German banking in more than a decade and could be the catalyst for a renewed period of cross-border consolidation among European financial institutions.

Commerzbank, Goldman and Rothschild declined to comment.

The addition of advisers comes as several rivals have been linked with potential interest in acquiring or merging with the bank. The list of prospective bidders include Italy’s UniCredit and French banks BNP and Crédit Agricole, analysts have said.

Speculation of interest in Commerzbank and a move by private equity group Cerberus to build a 5 per cent stake in recent months have driven up the company’s shares. The lender’s stock is up 57 per cent since the start of the year at €11.42.

However, any potential suitor would need to win the backing of the German government, which stepped in to rescue the bank during the financial crisis and still retains a stake of more than 15 per cent. Based on its current share price, Berlin’s stake in Commerzbank is worth €2.2bn.

So far, the full re-privatisation of Germany’s second-largest listed bank has not been a political priority. Germany’s Ministry of Finance this month said that the government does not feel any time pressure in selling its stake but wants to realise “a good economic result” for the taxpayers. Despite the gains in its share price, the bank still trades below the €26 per share the German government paid for its stake.

Martin Zielke, Commerzbank’s chief executive, has previously indicated he is not fundamentally against banking mergers. When Commerzbank merged with stricken domestic rival Dresdner Bank in 2009, Mr Zielke was part of the inner management circle implementing the tie-up. 

More recently, he told a private investor conference hosted by Bank of America in London that he could see the logic for more consolidation in the German banking sector, according to people who heard his comments in September.

However, people familiar with Mr Zielke’s thinking point out he does not see consolidation as a means in itself, especially as larger banks may face dis-synergies because of tougher capital requirements for larger financial institutions.


Additional reporting by Martin Arnold in London


Copyright The Financial Times Limited 2017. All rights reserved. You may share using our article tools. Please don't copy articles from FT.com and redistribute by email or post to the web.

https://www.ft.com/content/087... 

MORE NEWS

EU to remove Panama, Korea, UAE, 5 others from tax haven blacklist

EU to remove Panama, Korea, UAE, 5 others from tax haven blacklist
By Francesco GuarascioBRUSSELS (Reuters) - European Union officials have proposed removing eight jurisdictions from the blacklist of ...

Paradise Papers revealed 'commoditisation' of tax avoidance

Paradise Papers revealed 'commoditisation' of tax avoidance
By Gareth Hutchens Australian Taxation Office says investigation of data leak has identified 731 individuals and 344 corporate ...

Brexit talks latest: EU to target UK tax haven territories as trade negotiations begin

Brexit talks latest: EU to target UK tax haven territories as trade negotiations begin
By Joe Watts, Andrew GriceExclusive: European Commission official vows to 'go after' British territoriesDemands to open up Britain’s ...

Who's behind the blog

Who's behind the blog

SOCIAL MEDIA