- Commerzbank reported better than expected 94% profit leap
- Italy's UniCredit closing in on takeover
- Investor call offers management teams a chance to test positions
- Commerzbank CEO says major changes need agreement among stakeholders
FRANKFURT, Aug 6 (Reuters) - Commerzbank has begun talks with UniCredit over a possible takeover by the Italian lender and is optimistic a deal can be agreed, the German bank's CEO said on Thursday.
Public announcement of a resumption in talks and Commerzbank Chief Executive Bettina Orlopp's more conciliatory tone are major developments in the two-year battle for ownership of Germany's second-biggest bank by its Italian counterpart.
The exact nature of the talks and the individuals involved remained unclear, but the pronouncements emphasise Commerzbank's acceptance that it has run out of options for opposing the deal and wants to strike the best possible agreement.
The saga has taken a dramatic turn in recent weeks, with UniCredit edging towards control as Commerzbank officials signalled that talks would soon resume after UniCredit's €45 billion ($52 billion) hostile takeover approach.
'DETERMINED TO CREATE VALUE'
"We have started talks on this, which is in the genuine interest of both UniCredit and Commerzbank, as we are both determined to create value for our shareholders, clients and employees," Orlopp told analysts.
"I'm optimistic that, step by step, we can find common ground on governance and also on the business model."
Orlopp and her management team have long been opposed to a tie-up with UniCredit. There have been several rounds of talks but all have ended in disagreement.
UniCredit said it was unable to comment immediately on Orlopp's latest remarks.
Andrea Orcel, the UniCredit CEO, recently said that he wanted to negotiate with the German government and Commerzbank employees, sidestepping the German lender's management.
Orcel said that UniCredit has laid out a roadmap it wants in place from January and is ready to call an extraordinary shareholder vote to appoint a new supervisory board at Commerzbank if necessary.
UniCredit and Commerzbank have been holding post-earnings investor meetings since the Milanese lender became a shareholder. Thursday also offered an opportunity for both management teams to exchange views in an investor call.
Orlopp said on Thursday that it was in the best interest of both banks to move as quickly as possible and that they would try to identify possible cost savings and whether the banks could join forces on large investment programmes.
A Commerzbank presentation also showed the company's increasing willingness to work with UniCredit on a deal since the Italian bank built its 48% stake in the German lender.
Orlopp said on Thursday that UniCredit, even with that large stake, needs to work with her management team on a path forward rather than act unilaterally on any structural changes.
"It requires a shared understanding of the business model and the involvement of all stakeholders," she said after the Commerzbank reported a 94% jump in second-quarter net profit to €898 million, helped by stronger commission income.
The earnings beat analyst expectations of €845 million in a consensus forecast published by the bank.
A person familiar with UniCredit's thinking said before the results announcement that the Italian suitor was watching to see if Commerzbank shifts focus to Germany and away from international lending and trading, exposing a difference in opinion on strategy.
Commerzbank has said its international network is key to its strategy.
The German Finance Ministry, which oversees a 12% stake that the government has held since Commerzbank's bailout during the global financial crisis, said through a spokesperson that it was up to the two banks to discuss how to proceed and criticised UniCredit's "aggressive approach".
German opposition to Orcel's overtures has been widespread, emphasising the difficulty of merging large banks across euro zone countries to help them compete with bigger U.S. rivals.
($1 = 0.8662 euros)
Reporting by Tom Sims, Valentina Za and Joern Poltz Additional reporting by Christian Kraemer Editing by Linda Pasquini, Tom Hogue and David Goodman
Source: Reuters