KBC & Santander to Sell Stake in Zachodni

Banco Santander SA of Spain and KBC Groep NV of Belgium has decided to sale a stake in Polish bank Zachodni WBK SA. This decision is expected to raise around $1.68 billion and it is probably going to be a record setting Polish share offering. The banks have decided to offer as much as 20 million shares, where, each share will be priced at 240 Zloty to 270 Zloty. The final price will be confirmed by 21st March, as stated in a regulatory filing made by Zachodni. Incidentally, Zachodni is the 3rd biggest lender in Poland. This offering is going to be the biggest by a publicly traded company in Poland, thereby taking value of 2013’s deals to a whopping 14.9 billion Zloty. This marks a record start for 2013.

These stocks are being offered by Banco and KBC because on a whole, European stocks have experienced a slump off late. Apart from that, Euro, the shared currency of this region has gone down to its lowest level in 2013. In January, Sartender completed the merger of Zachodni with KBC’s Kredyt Bank SA and it is currently under pressure from the Polish regulators for boosting the proportion of the Zachodni shares that are available to the other investors. Once this sale happens, the so-called free float of the bank is expected to go to 30%.

Jaroslaw Niedzielewski, who is the Fund Manager of the Investors TFI SA, stated that the market has room for such a big deal and the bank is pretty well perceived by the investors as well. According to Niedzielewski, the situation on financial markets after the tax in Cyprus has changed the dynamics and therefore the foreign investors can decide to stay away.

Zachodni shares were unchanged at 268.8 Zloty per share on today. Incidentally, at one point of time on today, it experienced a slump of 2.3%, but, later pared the losses. The benchmark stock gauge of Poland, WIG20 Index has gone down by 0.9%, thereby extending its 4.7% decline experienced in 2013, till date.

KBC is looking forward to sell its entire stake of 16.2% as part of the deal. On the other hand, Santander has decided to offer only 5.2%, as far as the statement of the Zachodni officials are concerned. Since end of 2008, KBC has cut down risk-weighted assets by around 34%.