Germany seeks another adviser for Commerzbank stake

(Bloomberg) — Germany plans to hire a bank to advise on what to do with its remaining Commerzbank AG stake, people familiar with the matter said, after the latest sale drew criticism for letting UniCredit SpA in.

The government is talking to potential financial advisers and preparing to invite them for the role, said the people, who asked not to be identified because the information is confidential. The bank could provide strategic advice on the methods and timing of any future sales, or whether it should retain a 12% stake, the sources said.

The federal government will bring in another adviser in addition to JPMorgan Chase & Co., which worked with the German financial agency on the latest 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 euros ($20.9 billion).

Bringing in an additional bank could help Berlin defend against any future public accusations about its handling of the Commerzbank stake. Its sale in September was condemned by opposition politicians after UniCredit swooped in to buy the entire stake, turning the Italian lender into a major investor overnight and raising the prospect of a takeover.

Christian Haase, an opposition Christian Democrat lawmaker who sits on the German parliament’s budget committee, said last month that those responsible for the divestment process had “behaved in a dilettantish manner” and argued that no one should have been surprised by UniCredit’s move. The deal drove a wedge into Scholz’s divisive ruling coalition, with the finance ministry defending the manner of the sale and chancellor officials pushing for an investigation into how it happened, Bloomberg News reported.

The government is debating what to do with its Commerzbank stake, and Berlin has yet to make any final decisions, the people said. Representatives of the German Finance Ministry and Commerzbank declined to comment.

UniCredit continued to strengthen its position in Commerzbank after buying the state stake, increasing its stake to around 21%, including derivatives. Berlin said it was suspending further sales of Commerzbank shares until further notice. This decision is at least partly related to his dissatisfaction with the nature of the approach of UniCredit Chief Executive Officer Andrea Orsel.

Commerzbank’s new CEO, Bettina Orlopp, recently warned that a takeover of UniCredit could undermine its lending to the country’s SMEs and lead to a significant downgrade in its credit rating. UniCredit tried to allay any concerns, with a top executive at its German subsidiary saying the lender did not want a hostile deal.

(Update with stock movement in third paragraph.)

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