(Bloomberg) — Germany plans to hire a bank to advise on what to do with its remaining Commerzbank AG stake, according to people familiar with the matter, after the last selldown drew criticism for allowing UniCredit SpA to swoop in.
The government is speaking to potential financial advisers and preparing to invite them to pitch for the role, the people said, asking not to be identified because the information is private. The bank could provide strategic advice on the method and timing of any future divestments, or whether it should hold onto the 12% stake, the people said.
The move will see the federal government bring on another adviser in addition to JPMorgan Chase & Co., which worked with Germany’s finance agency on the last sale, some of the people said. Commerzbank shares were up 1% at 9:39 a.m. Tuesday in Frankfurt, giving the lender a market value of about €19.4 billion ($20.9 billion).
Bringing on an additional bank could help Berlin shield itself from any future public blame over its handling of the Commerzbank stake. Its sale in September was pilloried by opposition politicians after UniCredit seized on it to buy the whole package, turning the Italian lender into a major investor overnight and raising the prospect of a takeover.
Christian Haase, an opposition lawmaker from the Christian Democrats who sits on the German parliament’s budget committee, said last month that those responsible for the divestment process “behaved amateurishly” and argued that nobody should have been surprised by UniCredit’s move. The deal has driven a wedge into Scholz’s fractious ruling coalition, with the finance ministry defending the way the sale was handled and chancellery officials insisting on an investigation into how it played out, Bloomberg News has reported.
The government’s deliberations about what to do with its Commerzbank stake are ongoing, and Berlin hasn’t made any final decisions, the people said. Representatives for the German finance ministry and Commerzbank declined to comment.
UniCredit has continued to build up its position in Commerzbank since buying the government stake, boosting its holdings to around 21% including derivatives. Berlin has said it’s suspending further Commerzbank share sales until further notice, a decision at least partly stemming from its unhappiness over the nature of the approach from UniCredit Chief Executive Officer Andrea Orcel.
Commerzbank’s new CEO Bettina Orlopp recently warned that a takeover by UniCredit may undermine its lending to the country’s small- and medium-sized enterprises and likely see its credit rating deteriorate significantly. UniCredit has tried to assuage any concerns, with a top executive in its German subsidiary saying the lender doesn’t want a hostile deal.
(Updates with share movement in third paragraph.)
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