(Nov 18): Commerzbank AG shares could surge as much as 35% if the German lender is taken over by Italian bank UniCredit SpA, according to analysts at KBW.

UniCredit could offer up to €21 (RM98.88) a share should it move ahead with a full takeover bid, KBW analysts Thomas Hallett and Hugo Cruz wrote in a note on Monday. The shares are currently trading around €16. If UniCredit decides to walk away, Commerzank’s stock “would be under material pressure” and risks declining about 20%, they said.

Commerzbank investors are “better off under the UniCredit umbrella,” the analysts wrote. They expect UniCredit to make a final decision soon after Commerzbank’s capital markets day on Feb 13 and German federal elections set for Feb 23.

UniCredit has said it’s considering acquiring its German rival after building a major stake in the Frankfurt-based lender. The deal would create a bigger and better bank, UniCredit chief executive officer Andrea Orcel has said, while both Commerzbank management and the German government oppose it.

The German government could prevent a full takeover by using its 12% stake in Commerzbank, which would hinder UniCredit’s ability to achieve full cost savings, the analysts said. 

Shares of Commerzbank have gained 26% since news about UniCredit raising its stake in the German lender first emerged in September. 

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