Commerzbank (CRZBY) has officially told its shareholders to turn down a takeover bid from UniCredit (UCG), ramping up resistance to the proposed merger.
Earlier this month, UniCredit, which is now Commerzbank's biggest shareholder, put forth an exchange offer valuing the German bank at nearly 39 billion euros, or about $45.4 billion.
In a statement released on May 18, Commerzbank's supervisory and management boards made it clear that they believe the offer doesn't accurately reflect the bank's true value and could put shareholders at significant risk.
The bank pointed out that the suggested offer price is a considerable discount from what they think Commerzbank could achieve in the long run, emphasizing that their shares have consistently traded above that value since the offer was made.
Commerzbank also took issue with UniCredit's projections related to revenue losses, cost cuts, restructuring costs, and how long integration would take.
They highlighted particular worries about proposed job cuts, the challenges of merging IT systems, and possible revenue declines in overlapping corporate banking areas.
Bettina Orlopp, the CEO, said the offer doesn't include a sufficient premium and essentially amounts to a restructuring plan that would greatly disrupt Commerzbank's successful and established business model.
Recently, Commerzbank revealed plans to cut 3,000 jobs and raise its profitability goals as part of its effort to bolster its independent strategy.
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