Shares in Commerzbank AG fell 2.8 percent on Monday after Germany's second biggest lender announced a heavy 45 percent discount on a sale of new shares to help the bank repay state aid received in the financial crisis. The bank said late on Sunday it would issue 2.44 billion new shares at 2.18 euros each, raising around 5.3 billion euros ($7.5 billion).
The issue price comes at a 45 percent discount to Friday's closing price of 3.95 euros, and 30 percent below the theoretical ex-rights price (TERP). This was in line with what sources close to the process told Reuters last week. The rights issue is part of a series of measures by which Commerzbank plans to return by June 14.3 billion euros of the 16.2 billion the state injected into the bank during the crisis.
This will help free the bank from government controls such as a cap on bonuses. "We are in on it," said Lutz Wockel from NORD/LB Capital Management, one of Commerzbank's top 50 investors, adding the pricing came as expected. "After a transition period, Commerzbank is a clear 'buy'", he said. Earlier this month, Allianz, Commerzbank's second-biggest investor after the German government said it would fully exercise subscription rights.