Poland Wants Tamborski to Finalize Warsaw-Vienna Bourse Merger

Poland will shuffle management of Warsaw Stock Exchange SA to speed up preparations for a merger with Wiener Boerse AG and help the country’s sole equity market operator cement its position as the largest in central Europe.

The government, which holds a controlling stake in the Warsaw exchange, last week proposed appointing former Deputy Treasury Minister Pawel Tamborski as a new chief executive officer at a shareholders’ meeting on June 26. Tamborski, who earlier worked as an investment banker at UniCredit SpA in Warsaw, will replace Adam Maciejewski, whose term expires this month.

“I expect the new CEO to lead the process of a potential merger of the Warsaw and Vienna bourses to the point where I’ll be able to make a final decision on it,” Treasury Minister Wlodzimierz Karpinski said in e-mailed responses to Bloomberg News questions today. Tamborski started negotiations with the Vienna bourse and is “a credible partner for the Austrian side.”

Warsaw and Vienna bourse operators started merger talks in April 2013, seeking to protect their market positions in central and eastern Europe amid growing consolidation of stock markets worldwide and increased competition of alternative trading platforms. Vienna bought bourses in Ljubljana and Prague in 2008 and Budapest in 2004, creating The CEE Stock Exchange Group with a market capitalization of 131 billion euros ($178 billion) as of April, according to data on its website. That compares with the Warsaw exchange’s total value of listed companies at 201 billion euros.

Polish Interest

The planned merger is “a very difficult process for technical and procedural reasons as well as due to cultural differences” between the two bourses, Karpinski said. “The interest of the Polish market and economy will be our priority when we make a decision on the deal.”

Integration with Vienna is part of the Warsaw bourse’s expansion strategy until 2020. Its current CEO Maciejewski said in January he expects to complete the deal this year and the company may sell shares or bonds to finance the transaction.

The Warsaw exchange, which went public in 2010, is valued at 1.7 billion zloty ($559 million). Wiener Boerse, owned by Austrian financial institutions including UniCredit Bank Austria AG and Erste Group Bank AG (EBS), doesn’t publish financial statements. The Vienna group’s 226 stock listings compares with 456 in Warsaw.

“There are apparent risks connected to the valuation of Vienna and organizational issues arising from the merger,” Jaromir Szortyka, a Warsaw-based analyst at PKO Bank Polski SA, said by phone today. “Tamborski’s main task is to give a clear recommendation to the government as the Treasury Ministry apparently wants to have a final decision on the project.”

The bourse operators haven’t disclosed any details of their planned consolidation. The Polish government, which has 54 percent of voting rights at the Warsaw exchange, hasn’t said what stake it will keep in the combined entity and whether it will cede control.

To contact the reporter on this story: Konrad Krasuski in Warsaw at kkrasuski@bloomberg.net

To contact the editors responsible for this story: James M. Gomez at jagomez@bloomberg.net Pawel Kozlowski

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