On Tuesday, Unicredit (BIT:CRDI) SpA (UCG:IM) (OTC: UNCFF) received continued support from a major financial institution, with a reiterated Buy rating and a price target of EUR42.00.
The reiteration comes after Unicredit's unexpected disclosure that it has engaged in financial instrument contracts for approximately 11.5% of Commerzbank (ETR:CBKG) shares, with the potential to increase its stake to 21%.
The recent developments follow the German Government's confirmation last Friday that it would halt any further sales of its stake in Commerzbank. The preference for Commerzbank's independence has been voiced by multiple German stakeholders. This stance is expected to lead to market speculation regarding the complexity of the evolving relationship between Unicredit and Commerzbank, as well as to raise questions about Unicredit's prior statements on its strategic intentions.
The market is anticipated to react to this news with a dual perspective. "This could benefit CBK shares (as the market assigns a greater probability to a bid premium) but leave more uncertainty on UCG (execution risk of any potential deal)," said Citi analysts.
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