UniCredit won't participate in Commerzbank shareholder meeting, sources say
UniCredit's Strategic Decision Regarding Commerzbank's Annual General Meeting
Background of the UniCredit-Commerzbank Situation
FRANKFURT, May 19 (Reuters) - UniCredit will not participate in Commerzbank's annual general meeting on Wednesday, two people familiar with the matter told Reuters, opting for a passive role even as it battles for eventual control of the German lender.
This year's meeting comes at a critical juncture in the months-long tussle between UniCredit, which wants to take over its German competitor, and Commerzbank, which wants to remain independent.
Statements from UniCredit Leadership
In April, UniCredit CEO Andrea Orcel said the Italian lender had not yet decided whether it would participate in Commerzbank's annual meeting, though he hinted that the Milanese bank was likely to keep away from it.
Implications of Participation for UniCredit
Potential Control and Regulatory Consequences
UniCredit, which has launched a low-ball share exchange offer to lift its Commerzbank stake slightly above 30%, is keen to avoid being declared in control of Commerzbank under German laws.
Risks Associated with Increased Stake
Participation by UniCredit with its large stake could possibly risk UniCredit being declared to be in control of Commerzbank even without owning more than 50%.
Financial Impact of Gaining Control
That would result in UniCredit suffering a major capital hit as it is forced to consolidate its minority holding in Commerzbank on its books and set aside additional capital in what would be a costly move for the Italian bank.
Official Responses
UniCredit declined to comment.
(Reporting by Tom Sims and Valentina Za, editing by Ludwig Burger and Thomas Seythal)
