Suitors lined up for forced sale of Polish bank

By bne IntelliNews August 22, 2014

Jan Cienski in Warsaw -

 

The forced sale of Poland's small FM Bank PBP is attracting a lot of interest, with as many as 14 potential bidders reported to be lining up.

Abris Capital Partners, the private equity fund that owns the small lender, ran into trouble with Poland's Financial Supervision Authority (KNF) earlier this year. The banking regulator disagreed with board changes at FM Bank made by Abris, and more broadly felt that the fund had violated obligations made when it bought the business. The bank was created last year through the merger of two smaller institutions.

Abris denies it is in the wrong. However, KNF has refused to allow the Luxembourg-registered fund to exercise its voting rights over the bank, and in April demanded that it sell by the end of the year. That decision was partly reversed, but Abris's voting rights were not restored. KNF also made sure to reiterate that it could force a sale at any time. 

The regulator has recently performed another u-turn and begun pushing again for FM Bank's sale. "We have launched an administrative procedure on potential ordering of selling FM Bank shares owned by PL Holdings (indirectly by Abris-EMP Capital Partners Limited) by an established deadline," KNF said at the end of July.

Faced with repeat demands, and unable to exercise control over its investment, Abris threw in the towel and began to hunt for a buyer.

Several large private equity funds, including Enterprise Investors and MCI, are in the running, according to Puls Biznesu, although the KNF's antipathy towards Abris suggest that any sale to another PE player could be problematic. Michal Solowow, a wealthy property developer, is also thought to be interested.

However, KNF has made it very clear it wants a long-term and stable owner, not one investing simply to drive up the share price, which likely puts Polish banks at the front of the line as far as it's concerned. Leading candidate to take over is state-controlled PKO, the country's largest bank. The rapidly growing Alior Bank and BOS Bank are also reported to be sniffing. 

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