GERMANY rejected Unicredit's latest Commerzbank stake increase as an "uncoordinated and unfriendly approach" on Wednesday, strongly rebuking the Italian bank.

Unicredit, which angered Berlin when it emerged as Commerzbank's biggest private investor in September, said it had raised its stake in Commerzbank to 28 per cent using derivatives.

"Today's news is remarkable because Unicredit had previously publicly emphasised that it did not want to take any further action before the federal elections," a German government spokesperson said in response to the development.

Unicredit CEO Andrea Orcel had said he wanted to wait until a new government was in place in Berlin before making an offer, explaining that German takeover rules would force Unicredit to pay cash - and above a certain price - if it launched a full bid for Commerzbank within six months of acquiring at least 5 per cent.

"We reject Unicredit's uncoordinated and unfriendly approach," the spokesperson said, adding that the government in Berlin was "working hard to find a good solution for Germany", without giving details.

"By securing a larger stake, Unicredit is positioning itself to exert greater influence over Commerzbank's management, while limiting the German lender's strategic options,"

said Marco Troiano, Head of Financial Institutions, Scope Ratings.

Unicredit has said that while a combination with Commerzbank would be the best outcome, it can also remain purely an investor, or even sell its stake and pocket gains.

"This move reinforces Unicredit's view that substantial value exists within Commerzbank that needs to be crystallised," Unicredit said. REUTERS

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