A significant risk has emerged concerning Commerzbank’s ongoing share buyback program, as highlighted by New York-based investor Metronuclear. The firm’s founder, Roy Adams, cautions that the repurchase of shares could inadvertently trigger a mandatory takeover bid by UniCredit, the Italian banking group, which currently holds a substantial stake in the German lender.
According to various reports, UniCredit’s ownership currently stands at 29.34% of Commerzbank’s outstanding shares. Adams warned that as the total number of Commerzbank shares diminishes through the buyback program, UniCredit could unexpectedly surpass the 30% threshold, legally obligating them to launch a takeover offer.
“There’s a risk that Commerzbank unintentionally walks into a strategic trap” Adams stated in an interview with the Handelsblatt. He advised the bank to temporarily suspend its share buybacks and initially allocate distributions solely to dividend payments. Metronuclear, along with its partner firms, manages a portfolio holding approximately 500,000 Commerzbank shares and expresses a commitment to the bank’s continued independence.
While Commerzbank CEO Bettina Orlopp has expressed confidence in UniCredit’s professional conduct and indicated that any potential breach of the 30% threshold could be prevented through strategic sales, Adams remains skeptical. He suggested the possibility that UniCredit could exploit the share buybacks as a pretext to cross the limit and subsequently claim adherence to German law regarding the subsequent takeover bid. UniCredit has declined to comment on the matter.