Poland's PZU reportedly thrashing out a deal to buy Pekao from UniCredit

By bne IntelliNews August 29, 2016

State-controlled insurer PZU is pushing to thrash out a deal to buy the remaining 40% stake in Poland's second-largest lender Pekao from UniCredit, media reports claim.

Talks are said to have come to an impasse over price, with the Italian group seeking €3.5bn, while PZU is unwilling to pay over €3bn, The Financial Times reported on August 28, citing “people close to the situation". However, the state-controlled suitor is reportedly "confident" of wrapping up a deal by the time UniCredit's new CEO Jean-Pierre Mustier presents a group strategy in November.

PZU is being pushed by the government to expand into the banking sector to raise state ownership. The policy seeks to reverse the privatisation wave of the early 1990s that led to the takeover of much of the sector by foreign banks. Currently 58% of Polish banking is controlled by foreign investors.

CEO of PZU Michal Krupinski met management of UniCredit met in Milan last week to table an offer to buy Pekao for no more than €3bn, the FT claims. The offer is supported by capital from the Polish Development Fund through a special purpose vehicle, sources also told the newspaper. However, the Italians are apparently seeking around €3.5bn.

The dispute over price is, however, unlikely to last long, sources told the British newspaper. Mustier is looking to stabilise the capital footing of the Italian banking group, with UniCredit estimated to need as much as €9bn in new capital to stave off growing pressure due to bad loans.

The Italian banking system as a whole is facing growing threat from the issue, which has led the government in Rome to seek EU agreement on a bailout. UniCredit sold a 10% stake in Pekao via an accelerated bookbuilding in July, as well as offloading online banking unit Fineco.

The Italian group's decision to sell its remaining 40% in the Polish bank, despite the longer term potential of the country's sector, appears driven by the fact that it has a ready made suitor. The populist government is keen to increase the role of the state in the banking sector, which is dominated by foreign owners. PZU bought a controlling stake in Alior Bank last year, which in turn bought BPH from GE Capital in April.

“Pekao is one of the easiest assets to dispose of. The deal is moving forwards,” The Financial Times quoted “a person involved in the talks.” PZU and UniCredit did not offer comment. However, the two parties are clearly serious about reaching agreement, as PZU has appointed Deutsche Bank as an adviser to the deal while UBS and Morgan Stanley work for UniCredit, sources said.

PZU has also suggested it could take over Raiffeisen Polbank, which Austria's Raiffeisen Bank International has been looking to offload for around 18 months. Should the insurance giant wrap up both purchases, the Polish state would control 54% of the banking sector, according to analysts, already holding top lender PKO.

 

 

 

 

 

 

Related Articles

UniCredit reportedly in talks to sell Czech/Slovak unit

UniCredit is in talks with two local suitors over the sale of the Italian bank’s Czech/Slovak business, local media reported on March 27. The claim remains only speculation, but if accurate, it ... more

Russia's Sberbank selling its Ukrainian subsidiary

Russia’s largest bank Sberbank is selling its subsidiary in Ukraine to a consortium of investors that includes Latvia’s Norvik Bank and a private Belarusian company, Sberbank said in a statement ... more

Russian central bank governor Nabiullina to be nominated for further five-year term

The governor of the Central Bank of Russia (CBR), Elvira Nabiullina, will be nominated for another five-year term, President Vladimir Putin told the country’s top banker on March 22. The nomination ... more

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.

Dismiss