PKO Bank Slumps as Poland Sells $1.6 Billion Stake

PKO Bank Polski SA (PKO), Poland’s largest lender, slumped to a seven-week low as the government sold a $1.6 billion of stake to raise cash for investments and budget deficit financing.

The stock plunged as much as 4.3 percent and closed 1.6 percent lower at 34.76 zloty in Warsaw, the lowest since Dec. 4. The stake was sold at 34.25 zloty per share, the Treasury Ministry said on its website, which corresponds to the top end of a preliminary range, according to a term sheet obtained by Bloomberg. The benchmark WIG20 Index fell 0.3 percent today.

The Treasury Ministry and state-owned Bank Gospodarstwa Krajowego started taking orders for 146.9 million shares, or an 11.8 percent stake late yesterday, according to the term sheet. The sale was the biggest share offering by a publicly traded company in Poland, according to data compiled by Bloomberg.

“This was a very quick sale,” Rafal Janczyk, chief investment officer at Aviva Investors Poland TFI SA, which manages the equivalent of $3.7 billion of assets, said by phone. “The timing and size of the deal was a surprise.”

The number of PKO shares traded today was 1,029 percent of the three-month daily average, data compiled by Bloomberg show.

State Sales

Poland is selling assets to curb public debt and finance state investments. The Treasury Ministry today started a sale of a 25 percent stake in Warsaw-based property company Grupa PHN SA in an initial public offering. Other offerings this year may include utility Energa SA and insurer PZU SA. (PZU)

Bank BGK offered its entire 10.3 percent stake in PKO Bank while the Treasury Ministry is cutting its holding to 31.9 percent from 33.4 percent, according to the term sheet. The government pledged not to sell more shares in PKO within 180 days, the terms showed.

“We could see the Treasury sell its PKO stake down further to 25 percent, most likely in 2014,” Mark MacRae and Michal Konarski, analysts at Wood & Co., said in a note today.

Citigroup Inc., Deutsche Bank AG, PKO were global coordinators of the sale. Credit Suisse Group AG, Espirito Santo Investment Bank, Goldman Sachs Group Inc., Ipopema Securities SA and Societe Generale SA were joint bookrunners.

PKO trades 1.8 times its book value, above the industry’s average of 1.55 in eastern Europe, according to data compiled by Bloomberg. Its profit last year was “near” its record 2011 result of 3.81 billion zloty, Chief Executive Officer Zbigniew Jagiello said on Jan. 4.

To contact the reporters on this story: Piotr Bujnicki in Warsaw at pbujnicki@bloomberg.net; Maciej Martewicz in Warsaw at mmartewicz@bloomberg.net

To contact the editor responsible for this story: Wojciech Moskwa at wmoskwa@bloomberg.net

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