Commerzbank share price has pulled back from its highest point this year as investors wait for more information from UniCredit. The CBK stock was trading at €32.7 on Friday, down from the year-to-date high of €38.3.
Still, it is one of the best-performing companies in the blue-chip DAX Index. It has jumped by 120% this year, bringing its market cap to over €43 billion. So, what next for the lender after a new proposal from Unicredit?
Commerzank share price boosted by UniCredit
The CBK stock price has been in a strong rally this year as investors eye the proposed buyout by Unicredit, a major Italian company.
Unicredit started to quietly accumulate the company shares late last year as part of Andrea Orcel’s approach to gain market share outside of Italy. It had acquired about 21% of the bank in the fourth quarter of last year.
The company continued to accumulate the stock, and in March, the European Central Bank allowed it to raise its stake to 29.9%. This was a notable level as it is the maximum allowed without triggering a mandatory takeover.
There are signs that Unicredit is still interested in acquiring the company. One of these is a report by the Financial Times, which noted that Unicredit was open to making its board more German.
In this, a good number of seats on its board would come from Germany. Precisely, chances are that a third of the board members would come from Germany, where a third of its balance sheet will be from.
Still, it is unclear whether this proposal will be enough to convince the German government to allow a tie-up. That’s because the top leaders still want the company to remain German.
The other issue is that Unicredit’s buyout rumors have made Commerzbank highly expensive. Its €46 billion market cap is significant even for Unicredit, which has a valuation of €100 billion.
Read more: UniCredit CEO to sell Commerzbank stake outside EU if shareholders demand
CBK business is doing well
Fundamentally, Commerzbank’s business is doing well although it is unclear how the European Central Bank (ECB) interest rate cuts will affect it.
The most recent results showed that it operating result rose by 23% in the year’s first half to €2.4 billion. The net result jumped to €1.3 billion, a significant amount considering that it spent about €534 million in restructuring.
Commerzbank made revenues of €6.1 billion in the first half, a 13% jump from the same period last year.
The company is also rewarding its shareholders. It boosted its buyback to about €1 billion. Also, the company boosted its full-year numbers for profits and revenue.
Commerzbank stop price technical analysis
CBK stock chart | Source: TradingView
The daily timeframe chart shows that the Commerzbank stock price has plunged from a high of €38.3 in September to €32.7 today.
It has found a support at the 100-day Exponential Moving Average (EMA). Also, it formed a descending channel and is now along the upper side.
The two lines of the MACD indicator are about to cross each other. Also, the Relative Strength Index (RSI) has moved above the neutral level.
Therefore, the CBK stock will likely rise as investors react to the new reporting by FT and the potential response by Berlin.
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