(Bloomberg) -- A possible Commerzbank AG takeover by UniCredit SpA may be the trigger for more M&A in European banking, which would boost stock valuations for lenders seen as takeover targets, according to analysts at JPMorgan Chase & Co.
“Banking sector M&A historically has been triggered by momentum from deals being announced,” wrote analysts led by Kian Abouhossein in a note Thursday. “We would expect more newsflow on European bank M&A going forward, which could be a positive for valuations for banks that have historically been seen as targets.”
He cited lenders such as Italy’s Banco BPM SpA and Banca Monte dei Paschi di Siena SpA, France’s Societe Generale SA, Portugal’s Banco Comercial Portugues SA and Standard Chartered Plc in the UK.
Abouhossein raised his recommendation on Commerzbank to overweight from neutral, while also upgrading ABN Amro Bank NV and Banco BPM.
In his analysis, a deal for Commerzbank might come around €17.6 a share, roughly a 20% premium to its closing share price on Wednesday.
Commerzbank shares soared 17% on Wednesday after UniCredit said it had built a 9% stake in the company and planned to start talks. The executive board at the German bank is reviewing its defense strategy, Bloomberg News has reported citing people familiar with the matter. A merger of both banks would create the largest lender in Germany, surpassing Deutsche Bank AG.
--With assistance from Joe Easton.
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