UniCredit's Orcel could still sweeten his bid and take on a double M&A offensive

cnbc.com:

Divided between two takeover courtships, UniCredit's Andrea Orcel still has room to sweeten his bid for Italy's Banco BPM, analysts say, while political turmoil stalls a deal with Germany's Commerzbank. 

Once a key architect in the controversial 2007 takeover and later break-up of Dutch bank ABN Amro, Orcel revisited his ambitions for cross-border consolidation with the September announcement of a surprise stake build in Commerzbank. Until recently, the latter had been the subject of speculation as a potential merger partner for Germany's largest lender, Deutsche Bank.

Amid resistance from the German government — and turbulence in Chancellor Olaf Scholz's ruling coalition — UniCredit also last month turned its eye to Banco BPM, with a 10 billion-euro ($10.5 billion) offer that the Italian peer said was delivered on «unusual terms» and does not reflect its profitability and growth potential.

Along the way, Orcel drew frowns from the Italian administration, with Economy Minister Giancarlo Giorgetti warning that «the safest way to lose a war is engaging on two fronts,» according to Italian newswire Ansa.

Analysts say that the spurned UniCredit — whose CET1 ratio, reflecting the bank's financial strength and resilience, stood above 16% in the first three quarters of this year — can still improve its domestic bid.  

«There is scope for increasing the [Banco BPM] offer,» Johann Scholtz, senior equity analyst and Morningstar, told CNBC.

However, he warned of «limited» room to do so. «Think more than 10% [increase], you are probably going to dilute shareholder earnings.»

UniCredit's starting proposal was for an all-stock deal that would merge two of Italy's largest lenders, but offered just 6.657 euros for each share.

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