Germany-based lending company Commerzbank has reportedly finalized an agreement with activist investor Petrus Advisers, in order to increase its stake in online lending Fintech firm Comdirect. Commerzbank is planning to take over Comdirect’s business operations and aims to help the company reduce costs.
The takeover is a major part of Commerzbank’s company restructuring process, which the firm’s head, Martin Zielke, first revealed in September 2019. The strategy will allow for a quick delisting and a smooth integration of the firm’s internet or digital-only product offerings.
“With the increase of our Comdirect stake, we have laid the basis for a swift merger of Comdirect into Commerzbank.”
He added that the move was “an important step to quickly and efficiently execute the integration of [Comdirect’s operations] and realize significant synergies.”
Zielke says he aims to reduce around €150 million (appr. $167 million) in yearly costs via the integration of 2.7 million new company clients.
The institution’s stake in Comdirect has surpassed 90% after the purchase of the Petrus shares. Petrus’ management noted that at the end of 2019, it had a 7.5% stake in Comdirect, meanwhile, Commerzbank previously had around an 82% stake in the firm.
Comdirect shares closed at €13.28 (per share) on January 2, and an 8% stake in Comdirect was valued at approximately €150 million.
The transaction might raise some issues, with minority shareholders (possibly) requesting for compensation following the delisting. Third-party auditors will be tasked with determining the exact amount of compensation, which may be contested in court.
At present, Comdirect shares are valued at around 16% more than the €11.44 that Commerzbank had been offering, which was turned down by minority shareholders in December 2019. Petrus Advisers noted (at that time) that the Commerzbank offer did not “reflect the fair value of Comdirect on a standalone basis.”
The minority shareholders had rejected the takeover and Commerzbank’s management then shifted to another type of legal process to finalize it. Minority shareholders may receive shares, but not cash payments under the current terms.