(Bloomberg) -- UniCredit SpA Chief Executive Officer Andrea Orcel signaled a Commerzbank AG acquisition isn’t his current priority, after he started a takeover bid in his home market.
The proposed acquisition of domestic rival Banco BPM SpA reduces “the need to close on the other side,” Orcel said on a conference call in a reference to Commerzbank. He will only bid for the German lender “at certain conditions,” he said.
Commerzbank shares slumped Monday after UniCredit announced the €10 billion ($10.6 billion) offer for Italian rival Banco BPM, prompting investors to reassess the chances of an all-out bid for the German bank.
UniCredit in September unveiled a large stake in Commerzbank, with Orcel saying he’s considering an acquisition. But his unsolicited approach triggered a harsh backlash from the country’s government. Germany’s decision to call early elections has complicated his approach further.
A potential takeover of Commerzbank “will require time,” Orcel said, citing “respect for Germany and their elections.”
What Bloomberg Intelligence Says:
The proposed deal for Banco BPM may delay UniCredit’s pursuit of the German lender — which already looked to be a drawn-out affair given the hostile reception it faced from German politicians — but the all-share nature of the offer doesn’t reduce its firepower to continue its pursuit of Commerzbank.
-Philip Richards and Uzair Kundi, bank analysts
Commerzbank-UniCredit Deal Isn’t Over With Banco BPM Bid: React
He seemed to address potential concerns about getting involved in too many deals simultaneously, saying Commerzbank is just an investment and “not a deal.” It won’t be a management distraction for as long as that’s the case, he said, while the Banco BPM offer “is a transaction” and will require more attention.
“Given the reception we have had in certain places, we need to be patient,” Orcel said. He reiterated UniCredit has “the flexibility to pull back” from the stake in Commerzbank, which he views as “an investment.”
German Finance Minister Joerg Kukies recently reaffirmed the government’s opposition to a deal.
“We have a very critical position,”, Kukies said in an interview with state broadcaster ARD on Sunday. “So I assume that he won’t” make a hostile offer, Kukies said.
(Updates with Orcel comments from fifth paragraph.)
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