June 16, 2020 / 10:24 AM / 23 days ago

Cerberus vows no let up in push for change at Commerzbank

FRANKFURT (Reuters) - Cerberus will use “alternative paths” to force leadership change at Commerzbank (CBKG.DE) if it continues to resist calls to reform, the activist investor said in a letter to Germany’s second-biggest bank seen by Reuters on Tuesday.

FILE PHOTO: A company logo is pictured at the headquarters of Germany's Commerzbank AG during the annual results news conference in Frankfurt, Germany, February 13, 2020. REUTERS/Ralph Orlowski/File Photo

Cerberus did not spell out what those paths might be in the letter to the bank’s supervisory board chairman dated Monday.

One possibility is for the investor to invoke an extraordinary general meeting and ask other shareholders to back its demand for “substantial change” in the bank’s leadership.

Commerzbank last week rebuffed Cerberus’ demands for two seats on the bank’s supervisory board. The letter to the supervisory board was Cerberus’ response to that rejection.

“We stay committed to achieving substantial change to the leadership of Commerzbank and to the bank’s operational and strategic paths for the benefit of all of Commerzbank’s stakeholders,” Cerberus said in the letter.

In Europe’s banking sector, shareholder disagreements usually remain behind closed doors.

Commerzbank’s shares have fallen about 60% since Cerberus bought a 5% stake in 2017, when it became the bank’s second-largest shareholder after the German government.

Commerzbank, which last year announced plans to cut thousands of jobs, is currently in the process of identifying more cost cuts and will announce plans when it releases second quarter earnings in August.

Cerberus said the supervisory board bore responsibility for the bank’s “dire situation”.

“Unfortunately, it is a matter of fact that Commerzbank has not yet embraced or executed on any of our suggested actions,” Cerberus wrote.

A spokeswoman for Commerzbank declined to comment.

Reporting by Tom Sims; Editing by Michelle Martin and Mark Potter

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