*

Commerzbank share price has risen too much

*

A bid for Commerzbank now not good for UniCredit

shareholders

*

To drop Banco BPM deal unless Italy clarifies conditions

for bid

(Recasts combining comments on Banco BPM and Commerzbank)

By Valentina Za

MILAN, June 11 (Reuters) - UniCredit CEO

Andrea Orcel said on Wednesday he currently saw little scope to

advance his acquisition strategy, given that Commerzbank

had become too pricey and Italy was effectively

blocking a takeover of Banco BPM.

Veteran investment banker Orcel arrived at UniCredit in 2021

vowing to use M&A to speed up growth, provided deals meet strict

criteria that would allow him to retain the returns his

shareholders have enjoyed thanks to high interest rates and

tight cost control.

Having driven a seven-fold increase in UniCredit's share

price, Orcel last year moved on Commerzbank and smaller domestic

peer Banco BPM, sparking angry reactions in both Berlin and

Rome.

On Tuesday, Germany's finance minister said a letter that

Chancellor Friedrich Merz had written to Commerzbank staff to

express opposition to UniCredit was "an important signal" about

the government's stance.

Speaking to CNBC television in Berlin after attending a

financial conference organised there by Goldman Sachs ( GS ), Orcel

said Commerzbank's share price had anyway risen excessively,

making a bid an unattractive option.

"No, at this level, we would not see value for our investors

[in an offer for Commerzbank]," he told CNBC. "We're very happy

for the gain we've had on the 30% but we wouldn't see

value for our investors," he said.

UniCredit has acquired 28% of Commerzbank and Orcel said it

expected by the end of the month to complete the steps that

allow it to convert into equity the two-thirds of the stake

which UniCredit still owns as derivatives.

UniCredit would then decide whether to consolidate the stake

and it would in that case want to "exercise the power" that

comes with being the biggest shareholder. Orcel reiterated he

had given himself until 2027 to take a final decision on the

stake.

As for Banco BPM, Orcel said the chances of completing the

takeover offer were no higher than 20%.

The conditions Rome has imposed to authorise the bid, using

'golden powers' it has to protect national security interests,

are unclear and expose UniCredit to fines worth up to 20 billion

euros, Orcel said.

"The probability is 20% or less depending on whether the

government clarifies or does not clarify those topics," he said.