What should Deutsche Bank AG pay for Commerzbank AG? Any tie-up between the two would have to be structured as a takeover by the larger Deutsche Bank – implying the need to pay a premium.

The difficulty is that neither Commerzbank’s standalone valuation nor the appropriate top-up is clear. That’s helpful for Deutsche, which can scarcely afford to pay a high price.

Analysts’ price targets for Commerzbank vary from 5.16 euros ($5.86) to 12.50 euros a share and there’s no consensus about how much additional capital the combined lender would need to raise.

What’s more, the possibility of this tie-up has been so long mooted that some bid premium should have been baked into the target’s share price for a while. Deutsche’s previous CEO, John Cryan, explored a deal and rejected it in Aug. 2016. Commerzbank stock outperformed Deutsche during 2017 as its rival was forced to tap shareholders for money. Over the past year, the shares have traded roughly in lock-step, as if anticipating a tie-up, and were both trading at a near 70 percent discount to their book value by the end of 2018.

Deutsche will want to minimize the price paid while maximizing the apparent premium the offer contains. Trick one would be to say a deal was already in Commerzbank’s share price and push to combine the lenders at their average market values over the three months before the talks were confirmed – 16 billion euros and 8.2 billion euros. That would mean the target’s shareholders would get 34 percent of the enlarged institution.

Commerzbank shareholders would own a roughly one-third share in the future value created by the transaction. Suppose Deutsche could demonstrate the deal synergies have a net present value of 5 billion euros – not implausible if the transaction is expected to add 1 billion euros to net income by 2024, as JPMorgan analysts estimate. Turn a blind eye to restructuring costs, and Commerzbank shareholders would own 1.7 billion euros of that – equivalent to an implied 21 percent premium over the bank’s average market value over the last three months.

True, Commerzbank could argue that’s not an upfront payment. But then it would still have to conjure up a better plan for creating comparable value.

Plan B would be to exploit the recent rise in Deutsche’s shares and the weakness in Commerzbank’s during the first quarter when positioning the offer. Suppose Deutsche offers one new share for every Commerzbank share held, the bid would be worth 8.14 euros per share based on Monday’s close. The target’s shareholders would get 38 percent of the enlarged bank – more dilution than Deutsche might want, but still tolerable for the benefit of stronger earnings further out.

Compare that with Commerzbank’s share price over some self-serving time frames, and it’s not hard to get to the desired premium – in this case, 25 percent over the three-month average, 14 percent over Friday’s close, and 47 percent over December’s one-year low. Deutsche probably wouldn’t have to go that far – Commerzbank closed on Monday at 7.66 euros.

Valuing any Deutsche offer using recent averages for its stock would make it look less attractive. But it wouldn’t be relevant to the value that Commerzbank investors would be receiving in a deal today. In this case, it’s not the premium that counts – but making shareholders feel like they are getting one.

To contact the author of this story: Chris Hughes at chughes89@bloomberg.net

To contact the editor responsible for this story: Edward Evans at eevans3@bloomberg.net

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Chris Hughes is a Bloomberg Opinion columnist covering deals. He previously worked for Reuters Breakingviews, as well as the Financial Times and the Independent newspaper.

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