Commerzbank Said Close to Buying Petrus’s Comdirect Stake

(Bloomberg) -- Commerzbank AG is in advanced talks to buy an activist fund’s stake in its online broker Comdirect Bank AG in a move to speed up the German lender’s controversial overhaul, people familiar with the matter said.

Commerzbank could announce an agreement to buy Petrus Advisers’ 7.5% stake in the coming days or weeks, reaching a deal after the activist fund criticized its previous offer as too low, the people said. Petrus’s stake currently has a market value of 137.7 million euros ($153.9 million).

No final decisions have been taken and the talks could falter, the people added. Representatives for Commerzbank and Petrus Advisers declined to comment.

The move would boost Commerzbank’s holding in the online broker to around 90% and mark its second attempt in the past few months to take full control of the subsidiary. The bank’s initial approach to buy out Comdirect’s minority shareholders failed three weeks ago after too few investors agreed to sell.

Taking over the digital lender is a cornerstone of a broad overhaul presented by Commerzbank Chief Executive Officer Martin Zielke in September in the wake of failed merger talks with crosstown rival Deutsche Bank AG.

Read More: Zielke’s Commerzbank Strategy Hits Speed Bumps Three Months In

In September, Commerzbank announced a voluntary offer of 11.44 euros per share for the outstanding 18% in its online bank. But the move was blocked as Petrus Advisers Ltd. amassed shares and demanded a higher price, jeopardizing the swift integration necessary to reap cost savings Zielke is counting on.

Buying Petrus’s stake would give Commerzbank the legal right to squeeze out remaining shareholders and facilitate its integration.

The move will likely come at a price. Petrus earlier this month said the voluntary offer “does not reflect the fair value of Comdirect on a standalone basis, and it is significantly below the current share price,” indicating it would seek a substantially higher payout for its stake.

Some bankers suggested Commerzbank could have used other options such as simply buying shares over the market during the voluntary buyout offer or delisting Comdirect to keep activist investors from swooping in.

CEO Zielke has been facing mounting opposition to his turnaround plan from some of his largest shareholders and regulators. They have said the announced cost cuts, including the planned sale of Polish subsidiary mBank SA, do not go far enough, people familiar with the matter have said.

To contact the reporters on this story: Eyk Henning in Frankfurt at ehenning1@bloomberg.net;Steven Arons in Frankfurt at sarons@bloomberg.net

To contact the editors responsible for this story: Kenneth Wong at kwong11@bloomberg.net, Daniel Schaefer, Amy Thomson

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