Warsaw demands Santander listing

By bne IntelliNews March 8, 2012

Tim Gosling in Prague -

As it hinted when the deal was agreed in late February, the Polish regulator is demanding Spanish banking giant Santander list on the Warsaw Stock Exchange in return for giving its blessing to the merger between Zachodni WBK and Kredyt Bank.

The long-winded deal, which will see Santander take control of Kredyt from Belgium's KBC via a share swap with its Polish subsidiary Zachodni, will create the country's third largest bank. While it took months for the Spanish giant to find a way to make the deal without depleting its stock of Tier 1 capital, it has yet to seal approval from Poland's financial regulator KNF. "We want the mother company of the combined bank, that is Santander, to be listed on the Warsaw bourse, just as is the case with UniCredit and Pekao," KNF chief Andrzej Jakubiak told Reuters, referring to the Italian parent that took over the country's second largest lender Bank Pekao.

The authority said as much when the deal was announced. "Due to the size of the bank after this potential merger," KNF said in a statement on February 27, "we will use the functioning of the UniCredit Group... as a benchmark for evaluating the transaction and investment commitments." After protracted negotiations, UniCredit reached a deal that included maintaining Pekao's free float at 25%, avoiding mass layoffs for two years and shedding some assets.

"I would like the free float of the combined bank to equal at least 25%," Jakubiak said. "Another condition is that Santander controls the banks directly, without middle-companies." He added that if KNF's conditions are met, the transaction could be finalized this year.

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