FRANKFURT (Reuters) - Commerzbank (CBKG.DE), under fire for its strategy and leadership, on Friday rejected demands by top investor Cerberus for two seats on the German bank’s supervisory board, according to a letter seen by Reuters.
Earlier this week, Cerberus launched a public campaign for change at Germany’s second-biggest bank, demanding the seats, as well as cost cuts and a strategy shift.
“We don’t have any vacancies,” said the letter from Commerzbank’s chairman Stefan Schmittmann to Cerberus.
The outright rejection of Cerberus’ No. 1 demand is expected to further embolden the U.S. investor to continue with its push.
Knowing Commerzbank “and the people involved, we expected this answer,” said a person close to Cerberus. “Next steps to come”.
A spokeswoman for Commerzbank confirmed that it had sent the letter.
In the launch of its campaign this week, Cerberus complained that the bank had failed to heed its advice after more than 70 meetings with managers. Shares in the bank have fallen about 60% since Cerberus bought a 5% stake in 2017.
Cerberus described Commerzbank’s performance as “disastrous”, demanding it appoint two “highly qualified individuals to be identified by us” to its supervisory board.
Schmittmann said in Friday’s letter that all shareholder representatives had been elected with an overwhelming majority until 2023.
“For the time being we therefore don’t see neither the necessity nor a basis for a change regarding the composition of the supervisory board,” Schmittmann wrote.
The letter said that Cerberus was a “very important shareholder” and would have “ample opportunities” to offer its input to the bank’s leaders.
Reporting by Tom Sims; Editing by Leslie Adler, Sonya Hepinstall and Jonathan Oatis