Italy's UniCredit is pressing ahead with its bid to take over Frankfurt-based Commerzbank.
UniCredit said on Friday it has now secured nearly 40% of the lender's shares.
UniCredit said its exchange offer for all outstanding Commerzbank shares will remain open until July 3. Final results are expected to be published on July 8.
Commerzbank continues to advise shareholders against accepting the offer, arguing that it does not provide an adequate premium.
"The offer still contains no appropriate premium," the Frankfurt-based lender said in statement.
UniCredit is offering 0.485 of its own shares for each Commerzbank share. For much of the offer period, the implied value was below the market price of Commerzbank stock.
Nevertheless, Commerzbank said it remained open to talks if UniCredit showed a genuine willingness to address the concerns raised by the German bank.
"The prerequisites remain unchanged: an attractive premium for our shareholders and a plan that adequately reflects the success factors of our business model," Commerzbank said.
UniCredit said shareholders tendered 12.51% of Commerzbank shares during the offer period that ran from May 5 to June 16.
Combined with the 26.77% stake it already held before launching the offer, UniCredit's shareholding would rise to 39.28%, making it by far the largest shareholder in Germany's second-largest listed bank.
The Milan-based lender also has access to more than 3% of Commerzbank shares through options and holds additional financial instruments linked to the bank. Including those positions, UniCredit said its total economic exposure amounts to 42.5%.
That figure would rise to 44.33% once Commerzbank completes a previously announced share buyback programme, UniCredit said.
German government opposes bid
The German government, whose partial sale of its Commerzbank stake in September 2024 enabled UniCredit to build its position, has reiterated that it does not intend to sell its remaining stake of just over 12%.
Berlin said the offer does not contain "an appropriate premium" over Commerzbank's current share price and rejected what it described as UniCredit's "aggressive approach."
The government also stressed Commerzbank's importance to the financing of the German economy and its small and medium-sized businesses, as well as its role as a major employer and a key institution in Frankfurt's financial centre.
"Both must continue to be safeguarded in the future," the government said.
Dispute over takeover tactics
Commerzbank has resisted what it describes as UniCredit's "hostile" approach for nearly two years and has accused the Italian lender of artificially inflating its position in the bank.
To clarify the matter, Commerzbank has referred the issue to Germany's financial regulator BaFin. The bank's central works council has also filed a criminal complaint alleging possible market manipulation.
UniCredit rejects the allegations and recently suggested it could seek changes to Commerzbank's leadership if it gains sufficient shareholder backing.
UniCredit argues that criticism from Commerzbank distracts from the economic rationale of the transaction.
Already active in Germany through its subsidiary HypoVereinsbank, UniCredit says a merger could generate billions of euros in cost savings, including through the elimination of thousands of jobs.
