Germany Is Hiring Strategy Consultants for Its Commerzbank Stake
Germany Is Hiring Strategy Consultants for Its Commerzbank Stake
(Bloomberg) --
Commerzbank AG’s biggest shareholder, Germany, is seeking outside advice about its stake as Chief Executive Officer Martin Zielke readies the bank’s new strategic plan.
The Finance Agency, which manages the government’s 15.6% holding in the lender, invited bids for a consultant that will assess Commerzbank’s “strategic orientation” and provide recommendations, according to documents published on a website for government tenders.
The finance ministry declined to provide comment beyond wording used in the tender documents.
Commerzbank has seen revenue fall for three years straight and its stock is close to an all-time low. The bank held merger talks with rival Deutsche Bank AG earlier this year, but the two lenders jointly decided to end the negotiations. CEO Zielke now plans to present a strategy update to investors in the fall.
Foreign banks have shown interest in acquiring Commerzbank since the Deutsche Bank talks broke down, though no discussions have advanced beyond a preliminary stage, people familiar have said. Commerzbank Chief Financial Officer Stephan Engels said earlier this week that no suitors are currently “knocking” on the bank’s doors.
The German government took a stake in Commerzbank as part of a bailout during the financial crisis a decade ago. The state has said it would need to sell its stake at 26 euros a share ($29) to break even. The stock currently trades at about 5.4 euros.
Still, given Germany’s economic slowdown and growing demands for spending, it would be a good time to raise cash, said Otto Fricke, a budget expert with the liberal opposition party FDP.
"The risk of recession requires structural change," Fricke said in a text message. "Beyond tax incentives and a switch from spending on consumption to investment, that also includes the sale of shares, particularly in banks."
The request for bids was published on Aug. 4 and the deadline for bids is on Sept. 3. BoersenZeitung first reported on the contract tender.
--With assistance from Birgit Jennen and Christian Baumgaertel.
To contact the reporters on this story: Steven Arons in Frankfurt at sarons@bloomberg.net;Birgit Jennen in Berlin at bjennen1@bloomberg.net
To contact the editors responsible for this story: Dale Crofts at dcrofts@bloomberg.net, Ross Larsen, Raymond Colitt
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