PKO Bank Polski SA plans to make a revised cash bid today for a controlling stake in Bank Zachodni WBK SA, a smaller competitor being sold by Allied Irish Bank Plc, a person with knowledge of the matter said.
PKO, Poland’s largest bank, is bidding for 66 percent of Warsaw-based Zachodni, less than the 70 percent held by Allied Irish, because the purchase of a bigger stake would compel it to make an offer for the entire company, said the person, who declined to be identified because the discussions are private.
Under PKO’s proposal, Allied Irish would place its remaining 4 percent in the market, the person said. In the final stage of the transaction, PKO would offer to buy out minority shareholders in Zachodni with new shares in the merged bank, the person said.
Allied Irish, based in Dublin, is seeking to sell its entire stake in Bank Zachodni as part of a series of measures aimed at raising 7.4 billion euros ($9.5 billion) by year-end to reach new regulatory capital targets. Spain’s Banco Santander SA and France’s BNP Paribas SA have also made bids for the Polish unit, another person briefed on the situation said on Aug. 23. AIB’s stake was valued at 9.6 billion zloty ($3.11 billion) as of 12:45 p.m. in Warsaw today.
PKO, Allied Irish
A preferred bidder may be identified as early as Sept. 7, but it is unlikely to be granted exclusivity until later in September, said the person. PKO has told Allied Irish it could probably secure Polish regulatory approval of a transaction within three months of a sale being signed, the person said.
Allied Irish shares rose as much as 5.3 percent in Dublin trading, and was 3.1 cents higher at 79.1 cents by 2:49 p.m. In Warsaw, PKO rose 0.1 percent to 38.78 Polish zloty ($12.67) and Bank Zachodni gained 1.1 percent to 187 zloty.
“It would be encouraging to see Allied’s sales process coming to a conclusion soon,” said Sebastian Orsi, an analyst with Dublin-based Merrion Capital, who has a ‘hold’ recommendation on the stock. He estimates the bank could generate about 4.3 billion euros of capital from the sale of Polish and U.K. divisions, as well as its 22.5 percent stake in U.S. lender M&T Bank Corp.
Elzbieta Anders, a spokeswoman for Warsaw-based PKO, and Catherine Burke, a spokeswoman for Allied Irish, declined to comment on the bidding.
PKO would unify the banks’ retail branch networks under its own brand and combine their asset management businesses under Bank Zachodni’s Arka unit to create Poland’s largest money manager, said the person. The Dziennik newspaper had reported PKO could keep Zachodni as a separate unit.
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