Volkswacht Bodensee - Boss of Germany's Commerzbank cheered as she slams UniCredit advances

After spending over a year building up a stake in Commerzbank, Italy's second-biggest bank earlier this month officially launched a 35-billion-euro ($41 billion) takeover attempt for its German rival.

The bid is widely seen as too low, but it marks the latest move in the Italian bank's relentless pursuit of Commerzbank which has sparked fury from the lender and top German politicians.

Addressing Commerzbank's annual general meeting, CEO Bettina Orlopp slammed UniCredit's offer as a "an attempt to take over Commerzbank at a price that does not properly reflect the fundamental value and potential of our bank".

Commerzbank workers at the event -- wearing T-shirts in yellow, the colour of the bank's logo, emblazoned with the slogan "we own yellow" -- frequently applauded and cheered her speech.

A group of staff protesting outside the venue, in the western city of Wiesbaden, waved signs that read "UniCredit Go Away!" and "No Merger".

Other top Commerzbank officials lined up to criticise the bid led by UniCredit boss Andrea Orcel at the gathering of shareholders, who have have the final say in whether it succeeds.

- 'Inherent risks' -

Jens Weidmann, chairman of the supervisory board of the Frankfurt-based bank, warned shareholders would have to take on "UniCredit's inherent risks" in the event of a takeover.

He cited "increased exposure to Italian government bonds, a significantly higher proportion of non-performing loans, and still substantial operations in Russia".

UniCredit has wooed Commerzbank shareholders with promises of higher returns by refocusing its activity on the German market to spur faster growth.

Germany's second-biggest lender has sought to fend off the advances by boosting its financial targets, and also cutting jobs to become leaner and more attractive to shareholders.

Earlier this month, it announced plans to axe a further 3,000 jobs after last year saying it would cut thousands of positions.

Chancellor Friedrich Merz has led criticism from German politicians of what he has termed "hostile and aggressive approaches", saying recently that such actions are "how trust is destroyed".

But UniCredit argues that it is trying to create a pan-European banking behemoth that will be better equipped to take on larger US rivals internationally.

Some European officials have spoken out in favour of more cross-border banking mergers as part of efforts to unify the region's fragmented financial markets.

Despite her resistance to the takeover, Orlopp said Commerzbank remains "open to dialogue" with UniCredit, and set out three conditions.

"First, a dialogue based on trust. Second, a concrete plan -- strategically, operationally, and culturally," she said.

"And third, a convincing offer providing an adequate premium for shareholders."

C.Kreuzer--VB