MILAN, Dec 18 Reuters Italian bank UniCredit said on Wednesday it had raised its potential stake in Germany39;s Commerzbank to 28 by signing new derivative contracts.

UniCredit has applied to the European Central Bank to be allowed to get to 29.9 of Commerzbank. It said it was in touch with supervisors while the authorisation process was ongoing.

It said it held 9.5 of Commerzbank as a direct stake and 18.5 through derivatives.

UniCredit39;s average entry price for the entire position is below current trading levels, the bank said, indicating it would be able to liquidate the investment at a profit.

UniCredit39;s economic exposure is almost fully hedged, displaying prudence in approach and providing full flexibility and optionality.

The move comes while UniCredit has also launched a buyout offer for smaller domestic rival Banco BPM.

Reporting by Valentina Za Editing by Tomasz Janowski and Louise Heavens

Source Reuters