Poland Mulls Bid for UniCredit’s $4.8 Billion Stake in Pekao

  • Minister wants state-run companies to cooperate in bank bids
  • UniCredit is sounding out government interest in Pekao: Puls

Poland’s government is considering mounting a bid via state-run companies to buy a controlling stake in the country’s second-largest lender from UniCredit SpA to help boost local ownership in the industry.

UniCredit is sounding out the government’s interest in Bank Pekao SA, in which it holds a 50.3 percent stake worth 18.2 billion zloty ($4.8 billion), Puls Biznesu newspaper reported on Thursday, citing sources close to the government it didn’t name. Treasury Minister Dawid Jackiewicz said several hours later that state-controlled insurer PZU SA and PKO Bank Polski SA have the “capacity” for such takeovers, and that potential bids for Polish lenders on the auction bloc may include other state companies.

“Cooperation is possible, various types of financial constructions, including participation of third parties, especially when we’re talking about something the size of Pekao,” Jackiewicz told reporters in Warsaw. “We don’t want to pass by sales indifferently, as the share of Polish capital in the banking industry isn’t optimal.”

UniCredit, among Europe’s least capitalized banks, is reviewing its holdings in Pekao among other measures to boost capital, people with knowledge of the matter said last month. Polish bank valuations have been hit by a new levy imposed on their assets and political debate about potentially costly plans to convert foreign currency mortgages into zloty.

Falling Valuation

Pekao’s shares dropped 1.8 percent to 138 zloty at 3:32 p.m. in Warsaw, the lowest since Feb. 4. Warsaw’s WIG20 Index gained 1.2 percent. The WIGBank index grouping 15 Warsaw-listed lenders dropped to a price to book value of just above one in January, the lowest since 2009. It’s now trading at 1.1 times, compared with 1.6 times for Pekao, since the lender has almost no exposure to foreign-currency mortgages.

Taking into account the size of the potential deal, the list of potential buyers is “fairly short” and may include BNP Paribas SA, BBVA and “perhaps a Chinese bank, although thus far none has expressed a firm interest,” Dariusz Gorski, an analyst at Bank Zachodni WBK SA, said in a note on Thursday.

While PKO’s participation in a potential deal may be opposed by the country’s antitrust regulator due to its market share, PZU insurer may join forces with other state institutions and lead the bid, Puls reported.

“No decisions have been taken about who’s involved and in what way,” Jackiewicz said, regarding a potential state-backed bid. “Of course, we wouldn’t want our companies to compete with each other.”

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