Germany to seek another Commerzbank equity adviser

(Bloomberg) — Germany plans to hire a bank to advise on what to do with its remaining Commerzbank shares, people familiar with the matter said, after a previous sell-off drew criticism for allowing UniCredit to step in.

The government is talking to potential financial advisers and preparing to invite them to run for the position, people familiar with the matter said. They requested anonymity because the information is private. The bank could provide strategic advice on the approach and timing of future divestments, or whether it should retain a 12% stake, people familiar with the matter said.

Some people familiar with the matter said the move would see the federal government hire another adviser in addition to JPMorgan Chase & Co, which worked with the German financial institution on the previous sale. Commerzbank shares were up 1% at 9:39 am in Frankfurt on Tuesday, giving the bank a market value of about 19.4 billion euros ($20.9 billion).

Adding an additional bank could help Berlin avoid future public criticism over its handling of Commerzbank shares. UniCredit seized the opportunity to acquire the entire scheme, turning the Italian bank into a major investor overnight and raising the possibility of a takeover, whose sale in September was derided by opposition politicians.

Christian Haas, an opposition lawmaker from the Christian Democrats who sits on Germany’s parliamentary budget committee, said last month that those responsible for the divestment process “acted like amateurs” and argued that no one should be surprised by UniCredit’s move. The deal has created a rift with Scholz’s governing coalition, with the Treasury Department defending its handling of the deal and prime ministerial officials insisting it be investigated, Bloomberg reported.

The government is considering what to do with its stake in Commerzbank and Berlin has not yet made any final decisions, people familiar with the matter said. Representatives for the German Finance Ministry and Commerzbank declined to comment.

Since buying the government stake, UniCredit has continued to consolidate its position in Commerzbank, increasing its stake (including derivatives) to around 21%. Berlin said it would suspend further sales of Commerzbank shares until further notice, a decision stemming at least in part from its dissatisfaction with the nature of UniCredit Chief Executive Andrea Orcel’s approach.

Commerzbank’s new chief executive Bettina Orlopp recently warned that the UniCredit takeover could harm its lending to the country’s small and medium-sized enterprises and could damage its credit rating Significantly worsened. UniCredit sought to quell any concerns, with an executive at its German unit saying the bank did not want a hostile deal.

(Updates stock movement in third paragraph.)

More stories like this can be found at Bloomberg.com