Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Commerzbank chief Bettina Orlopp shot down an invitation from Andrea Orcel to hold informal talks about a potential tie-up with UniCredit, and has instead insisted on receiving a written proposal before engaging, according to people familiar with the situation.
UniCredit’s chief executive met Orlopp in November at the sidelines of a JPMorgan Chase conference in London, the people said.
During that conversation, the Italian banker gave a broad outline of his vision for an enlarged lender, including views on potential job cuts, the location of its headquarters, branding and commitment to small and medium-sized businesses, also known as Mittelstand, according to one of the people.
Orcel suggested to Orlopp that the two chief executives hold a further meeting with a small group of staff at a “place that nobody knows over a weekend”.
The aim of the summit would have been to hash out key issues and attempt to ascertain each side’s red lines and potential room for compromise.
Orlopp rejected the idea, arguing she first needed a written proposal to decide if any further meeting made sense, the people said.
Commerzbank and UniCredit declined to comment on any potential interaction between Orcel and Orlopp.
“We have consistently signalled our willingness to engage in discussions and would review a proposal from UniCredit in the interest of all stakeholders,” Commerzbank told the Financial Times.
The German bank stressed that it had demanded “a specific proposal regarding the economic and structural terms of a transaction” before entering potential talks. “We have not received any [such] proposal yet.”
Commerzbank investors last year called on the bank’s management to engage with UniCredit, which since September built a 28 per cent exposure to its German rival.
Commerzbank said that it held a series of “investor talks” with its second-largest shareholder, discussing its operative performance and strategic objectives without addressing any potential transaction.
Commerzbank told the FT that UniCredit’s approach of “unilaterally building up and expanding a significant stake” was “hostile” and “unnecessarily antagonised many stakeholders on our end.”
People familiar with UniCredit’s internal discussions said the bank was unwilling to submit written terms ahead of talks because of fears they would be leaked in an attempt to derail the discussions.
The German government, Commerzbank’s management and its workers council have been highly critical of a potential transaction, citing concerns over job losses and lending to small and medium-sized businesses.
The Italian lender’s pursuit of Commerzbank has been paused by snap elections in Germany, due to take place next month, and it is likely to have to wait for a new government to form before trying to make further inroads.
“Without the support of the German government, it will be difficult [to strike a deal]”, Orcel previously told Frankfurter Allgemeine Zeitung.
UniCredit told the FT that as an investor in Commerzbank, “we hope that management are taking every opportunity to seriously engage in a way that gives them full transparency around what a possible offer would entail”.
The Italian bank had made it “very clear” it was “available at any time to sit around a table to discuss keys topics and try and reach an agreement in the interests of all stakeholders”, it added.
Read the full article here
