Cerberus Capital Management LP has decided to enter even more deeply into the German credit system by focusing on Commerzbank directly, attacking its current management. Cerberus sent a letter directly to the Bank's Supervisory Board, one of the two supervisory bodies in the German dual management system, highlighting the shortcomings and proposing himself as an actor for his rescue.
The five-page letter, dated June 9, depicts the second German bank as having a leadership focused on revenue growth with no profit generation and not brave enough to cut significant operating costs, as reported in the press. Cerberus threatens to approach Commerzbank's shareholders directly if his advice and requests are not accepted.
Cerberus said he was " alarmed by the refusal by the board of directors and supervisors to recognize the seriousness of the situation and the abuse unable to take adequate corrective actions ", adding that "the window of opportunity to face the challenges is it is rapidly closing . " You can understand the effect that such communication could have on consumers. After all, CB shares have lost 57% of their value since 2017, the year in which Cerberus bought a 5% stake in the bank, one of the worst performances in the banking sector.
What does Cerberus ask? To have a say in the management of the bank with two positions on the Control Board, thus being able to put word in the strategic choices and, above all, to start the cost cuts (read personnel …) that have so far been blocked by the unions.
It must be said that the company has a very particular position in the German credit system: in fact Cerberus owns approximately 3% of CB's direct competitor, Deutsche Bank AG, in which it already performs an advisory function through its own subsidiary, Cerberus Operations Advisory Company . Now he also wants to become a consultant to his competitor: isn't there really anyone who feels a little stink of conflict of interest?
The article CERBERUS TRIES TO TAKE CONTROL OF COMMERZBANK, After having already influenced DB… it comes from ScenariEconomici.it .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/cerberus-cerca-di-prendere-il-controllo-di-commerzbank-dopo-ave-gia-influenzato-db/ on Fri, 12 Jun 2020 11:09:32 +0000.