European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

<ul>
<li>Danish Compromise Uncertainty: If Banco BPM fails to secure Danish Compromise approval, its CET1 ratio could decline by 268bps, making it a riskier acquisition for UniCredit, potentially jeopardizing the deal.</li>
<li>UniCredit’s Strategic Dilemma: UniCredit may renegotiate the exchange ratio, withdraw the bid, or pursue Commerzbank instead, as Banco BPM’s Anima acquisition increases capital consumption risks and complicates UniCredit’s strategic plans.</li>
<li>Market Skepticism: As of February 18, 2025, Banco BPM's shares trade at €9.04, while UniCredit's offer values them at €8.47, leading to a +6.7% gross spread.</li>
</ul>


Danish Compromise Uncertainty: If Banco BPM fails to secure Danish Compromise approval, its CET1 ratio could decline by 268bps, making it a riskier acquisition for UniCredit, potentially jeopardizing the deal.
UniCredit’s Strategic Dilemma: UniCredit may renegotiate the exchange ratio, withdraw the bid, or pursue Commerzbank instead, as Banco BPM’s Anima acquisition increases capital consumption risks and complicates UniCredit’s strategic plans.
Market Skepticism: As of February 18, 2025, Banco BPM's shares trade at €9.04, while UniCredit's offer values them at €8.47, leading to a +6.7% gross spread.


UniCredit's Banco BPM Takeover: A Deal on the Brink?

<ul>
<li>Commerzbank's Strong Standalone Outlook: The bank exceeded 2024 targets, announced a 100% payout ratio by 2028, and aims for €14.2 billion in revenue and 15% RoTE by 2028, reducing the urgency for a sale.</li>
<li>UniCredit's Takeover Strategy: UniCredit has secured a 28% synthetic stake in Commerzbank and plans to convert it into equity by mid-2025, with a potential &gt;€20/share bid expected late 2025/early 2026.</li>
<li>Political and Regulatory Challenges: The German government (12% owner), labor unions, and local politicians oppose the deal, citing financial sovereignty concerns, making a near-term takeover highly uncertain despite UniCredit's strategic push.</li>
</ul>


Commerzbank's Strong Standalone Outlook: The bank exceeded 2024 targets, announced a 100% payout ratio by 2028, and aims for €14.2 billion in revenue and 15% RoTE by 2028, reducing the urgency for a sale.
UniCredit's Takeover Strategy: UniCredit has secured a 28% synthetic stake in Commerzbank and plans to convert it into equity by mid-2025, with a potential &gt;€20/share bid expected late 2025/early 2026.
Political and Regulatory Challenges: The German government (12% owner), labor unions, and local politicians oppose the deal, citing financial sovereignty concerns, making a near-term takeover highly uncertain despite UniCredit's strategic push.


UniCredit/Commerzbank: Comerzbank's CMD, Update on Timeline and Challenges

<ul>
<li>Banco BPM raises offer for Anima to €7.00 per share, securing over 43% shareholder support. Shareholders will vote on February 28, with deal completion expected in mid-2025, pending regulatory approvals.</li>
<li>Strategic acquisition boosts Banco BPM’s non-interest income to 50% of total revenues and strengthens its wealth management and insurance business, reinforcing its defense against UniCredit’s €10 billion takeover attempt.</li>
<li>Market assigns a 92% probability of deal completion. Shareholders are advised to accept, as failure to tender may result in lower liquidity.</li>
</ul>


Banco BPM raises offer for Anima to €7.00 per share, securing over 43% shareholder support. Shareholders will vote on February 28, with deal completion expected in mid-2025, pending regulatory approvals.
Strategic acquisition boosts Banco BPM’s non-interest income to 50% of total revenues and strengthens its wealth management and insurance business, reinforcing its defense against UniCredit’s €10 billion takeover attempt.
Market assigns a 92% probability of deal completion. Shareholders are advised to accept, as failure to tender may result in lower liquidity.


Banco BPM’s Sweetened Takeover Offer for Anima Holding

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

<ul>
<li>Our outlook remains bullish on MSCI ACWI. Discussed in latest Int’l Compass (1/9/2025) how viewed the pullback as buying opportunity and were watching for $116-$117 support to hold on ACWI-US.</li>
<li>$116 support held perfectly and we expect upside to continue following 1+ month bull flag breakouts, followed by successful retests of support, on ACWI-US and the S&amp;P 500.</li>
<li>We also upgraded Germany to overweight last week, with RS on the DAX breaking out from a 2-year base. U.S. (SPX) and Germany are our only two country overweights.</li>
</ul>


Our outlook remains bullish on MSCI ACWI. Discussed in latest Int’l Compass (1/9/2025) how viewed the pullback as buying opportunity and were watching for $116-$117 support to hold on ACWI-US.
$116 support held perfectly and we expect upside to continue following 1+ month bull flag breakouts, followed by successful retests of support, on ACWI-US and the S&amp;P 500.
We also upgraded Germany to overweight last week, with RS on the DAX breaking out from a 2-year base. U.S. (SPX) and Germany are our only two country overweights.


Remain Risk-On With Market Dynamics Improving; 6+ Month Base Breakouts for MSCI ACWI Ex-US and EAFE

<ul>
<li>UniCredit increased its economic exposure to Commerzbank to approximately 28%, aligning with its strategy to reach a 29.9% stake, pending ECB approval in early 2025.</li>
<li>Commerzbank’s operational inefficiencies and valuation at 0.56x tangible book value highlight challenges for independence, reinforcing the rationale for a potential UniCredit takeover. My core position would be long Commerzbank.</li>
<li>Projected synergies for a UniCredit-Commerzbank merger range from €705 million to €1.409 billion annually, with significant upside for Commerzbank’s share price if a takeover occurs.</li>
</ul>


UniCredit increased its economic exposure to Commerzbank to approximately 28%, aligning with its strategy to reach a 29.9% stake, pending ECB approval in early 2025.
Commerzbank’s operational inefficiencies and valuation at 0.56x tangible book value highlight challenges for independence, reinforcing the rationale for a potential UniCredit takeover. My core position would be long Commerzbank.
Projected synergies for a UniCredit-Commerzbank merger range from €705 million to €1.409 billion annually, with significant upside for Commerzbank’s share price if a takeover occurs.


UniCredit's Strategic Stake in Commerzbank and Implications for a Takeover

Italy

UniCredit S.p.A. attracts deposits and offers commercial banking services. The Bank offers consumer credit, mortgages, life insurance, business loan, investment banking, asset management, and other services. UniCredit operates worldwide.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

UniCredit SpA (UCG IM)

UniCredit's Banco BPM Takeover: A Deal on the Brink?

Uncertainty over Danish Compromise approval could impact Banco BPM's CET1 ratio and jeopardize UniCredit's acquisition plans, leading to market...

Jesus Rodriguez Aguilar

UniCredit/Commerzbank: Comerzbank's CMD, Update on Timeline and Challenges

Commerzbank's strong performance and resistance to UniCredit's takeover bid create uncertainty despite ambitious growth targets.

Jesus Rodriguez Aguilar

Banco BPM’s Sweetened Takeover Offer for Anima Holding

Banco BPM raises offer for Anima to €7.00/share, strengthening wealth management and insurance business to fend off UniCredit's takeover attempt.

Jesus Rodriguez Aguilar

Remain Risk-On With Market Dynamics Improving; 6+ Month Base Breakouts for MSCI ACWI Ex-US and EAFE

Remain Risk-On With Market Dynamics Improving; 6+ Month Base Breakouts for MSCI $ACWI ex-US and $EAFE; U.S. Dollar $DXY and 10-Year Yields $TNX...

Vermilion Research

UniCredit's Strategic Stake in Commerzbank and Implications for a Takeover

UniCredit increases stake in Commerzbank to 28%, eyeing potential takeover pending ECB approval in 2025. Synergies projected to boost share price...

Jesus Rodriguez Aguilar

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

UniCredit's Banco BPM Takeover: A Deal on the Brink?

​Uncertainty over Danish Compromise approval could impact Banco BPM's CET1 ratio and jeopardize UniCredit's acquisition plans, leading to market...

Jesus Rodriguez Aguilar

UniCredit/Commerzbank: Comerzbank's CMD, Update on Timeline and Challenges

​Commerzbank's strong performance and resistance to UniCredit's takeover bid create uncertainty despite ambitious growth targets.

Jesus Rodriguez Aguilar

Banco BPM’s Sweetened Takeover Offer for Anima Holding

​Banco BPM raises offer for Anima to €7.00/share, strengthening wealth management and insurance business to fend off UniCredit's takeover attempt.

Jesus Rodriguez Aguilar

Remain Risk-On With Market Dynamics Improving; 6+ Month Base Breakouts for MSCI ACWI Ex-US and EAFE

Remain Risk-On With Market Dynamics Improving; 6+ Month Base Breakouts for MSCI $ACWI ex-US and $EAFE; U.S. Dollar $DXY and 10-Year Yields $TNX...

Vermilion Research

UniCredit's Strategic Stake in Commerzbank and Implications for a Takeover

​UniCredit increases stake in Commerzbank to 28%, eyeing potential takeover pending ECB approval in 2025. Synergies projected to boost share price...

Jesus Rodriguez Aguilar

Uncertainty over Danish Compromise approval could impact Banco BPM's CET1 ratio and jeopardize UniCredit's acquisition plans, leading to market...

Commerzbank's strong performance and resistance to UniCredit's takeover bid create uncertainty despite ambitious growth targets.

Banco BPM raises offer for Anima to €7.00/share, strengthening wealth management and insurance business to fend off UniCredit's takeover attempt.

UniCredit increases stake in Commerzbank to 28%, eyeing potential takeover pending ECB approval in 2025. Synergies projected to boost share price...