UniCredit ups Commerzbank stake as BPM bid faces hurdles
UniCredit ups Commerzbank stake via derivatives to 28%
Process ongoing to seek authorisation for stake of up to 29.9%
UniCredit also trying to buy Italian rival BPM
BPM's market price well above UniCredit bid's price
Adds comments from Commerzbank in paragraph 4, details in 8-10
MILAN, Dec 18 (Reuters) -UniCredit CRDI.MI has raised its stake in Germany's Commerzbank CBKG.DE to 28% with new derivative contracts, the Italian bank said on Wednesday, as its bid for smaller domestic peer Banco BPM BAMI.MI faces hurdles.
UniCredit in September emerged as the biggest private investor in Commerzbank, in a move that angered the German government. It sought European Central Bank clearance to get to 29.9% - just below the level that triggers a mandatory takeover offer - before raising the stake with derivatives to near 21%.
The authorisation process is ongoing, UniCredit said, adding it was in touch with supervisors. The process can take up to 90 working days from when the ECB receives the documents.
UniCredit now holds 9.5% of Commerzbank directly and 18.5% through derivatives.
A spokesperson for Commerzbank said the bank would not comment on UniCredit's announcement, other than saying it continues to focus on implementing its strategy which it will present to investors on Feb. 13.
Shares in Commerzbank were up 3.9% at 0841 GMT.
"UniCredit's average entry price for the entire position is below current trading levels," the bank said, indicating it would be able to liquidate the investment at a profit.
"UniCredit's economic exposure is almost fully hedged, displaying prudence in approach and providing full flexibility and optionality."
The move comes while UniCredit is under pressure in Italy to improve its bid for Banco BPM, with its offer at a 14% discount to the market price as of Monday.
Announcing the BPM bid, UniCredit CEO Andrea Orcel said his bank could not afford to be side-lined in accelerating consolidation in its home market.
He added he was pausing expansion efforts in Germany until a new government was in place because of a rule that would force UniCredit to pay cash - and with a floor on the price - if it launched a full bid for Commerzbank within six months of crossing the 5% ownership threshold.
Reporting by Valentina Za in Milan and Tom Sims in Frankfurt. Editing by Louise Heavens and Mark Potter
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