Poland Approves PZU Sale, Europe’s Biggest 2010 IPO

(Bloomberg) -- Poland’s financial regulator approved the prospectus for an initial public offering worth at least 5.5 billion zloty ($1.9 billion) by state-owned insurer PZU SA, which would be the biggest European IPO in 2010.

The government and Eureko BV will seek to sell as much as 30 percent of central Europe’s biggest insurer, the regulator said in an e-mailed statement today. The IPO documents will be published on April 16.

The offering is part of the government’s plan to raise a record $10 billion from the sale of state assets this year to help finance the widening budget deficit. Poland also wants to sell stakes in its biggest energy, chemical and phone companies as well as the Warsaw Stock Exchange.

The PZU sale plan comes as the Warsaw Stock Exchange extended its rally to a 19-month high yesterday, even after a plane crash on April 10 killed the country’s president, Lech Kaczynski, the central bank governor and dozens of officials. Tauron Polska Energia SA, a state-owned power group, yesterday filed an IPO prospectus, seeking to go public by June.

PZU owners planned to start meeting investors and set a price range for the deal this week, two people familiar with the terms said on April 6. The price is likely to be set around April 26, with trading in Warsaw starting the week of May 10, said the people, who declined to be identified because the terms are private.

One-Time Option

Poland and Eureko set the minimum value for the entire company at 25 billion zloty, or 289.5 zloty a share, in an October agreement that resolved an eight-year dispute over PZU’s ownership and opened the door to an IPO. The insurer’s two biggest owners earlier said they planned to sell a stake of at least 22 percent, valuing the holding at 5.5 billion zloty.

The price for one PZU share in over-the-counter trade now is about 360 zloty, said Marcin Juzon from a private-equity firm Secus Holding SA, which holds “several thousand” PZU shares in behalf of its clients. He expects PZU owners to set the price range from 300 zloty to 400 zloty a share.

The minimum valuation set by owners would make PZU the biggest IPO in Europe since Polish power group PGE SA last year, exceeding the 760 million-euro ($1.03 billion) March sale by Kabel Deutschland Holding AG.

Eureko has a one-time option to block the initial offering if it thinks the price is too low, according to the accord it reached with the government last year.