(Bloomberg) -- The German government has started an internal probe into its Commerzbank AG share sale after the transaction allowed UniCredit SpA to swoop in and take a major stake in the lender.
The Chancellery isn’t happy with the outcome of the placement last week, which was overseen by Germany’s Finance Agency, and it’s now trying to figure out what went wrong, people familiar with the matter said. It’s looking at the sequence of events leading up to the share sale and why no one involved seemed to anticipate the possibility of a strategic investor buying the entire 4.5% tranche of Commerzbank stock.
Representatives for the government and the Finance Agency declined to comment.
The stake sale will also be scrutinized by a German parliament committee next Wednesday as lawmakers have asked the finance ministry for information about the way the placement was handled and its outcome.
UniCredit Chief Executive Officer Andrea Orcel managed to build a 9% stake in Commerzbank, turning the Italian bank into the second-largest shareholder overnight. Orcel seized on Germany’s first sale of shares in Commerzbank since a bailout over a decade ago, and subsequently said he’s considering a full takeover.
Berlin was caught off guard, having expected institutional investors to each buy small amounts in the sale, Bloomberg has reported. Labor union Verdi has since put pressure on the government to halt further share sales and stop UniCredit from buying Commerzbank as it’s concerned about job cuts in the wake of a potential deal.
UniCredit’s investment in Commerzbank shouldn’t have come as a surprise to the relevant parties, Orcel said in a Bloomberg TV interview a day after the Italian lender unveiled its stake. The German government also was “well aware” that UniCredit had built up a separate 4.5% position in Commerzbank when the share sale took place, Orcel said in the interview.
--With assistance from Sonia Sirletti and Kamil Kowalcze.
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