BIG BG, Deutsche Bank enter round two
After a two-week break, BIG Bank Gdanski resumed its contentious shareholders meeting last Friday. Deutsche Bank was expected to renew its push to take over the Polish bank at that meeting, but it was unclear at press time what the outcome would be.
Analysts said last week that the takeover was basically a done deal, particularly considering a prior agreement that the German bank had signed with a key BIG BG shareholder, Powszechny Zaklad Ubezpieczen (PZU). In that agreement, state-owned insurer PZU agreed to sell Deutsche Bank part of its more than 8% stake in BIG BG for zl. 126.5 million ($30 million). That agreement was contingent on Deutsche Bank receiving all necessary permits to increase its stake in BIG BG to more than 25%.
According to the agreement, which the Business Journal has viewed, PZU signed away its shares one day before BIG BG and European insurer Eureko bought a 30% stake in the Polish insurer as part of its privatization. The Treasury Ministry has expressed concern that the share package could result in Deutsche Bank eventually also taking over PZU as well.
The agreement has certain penalties for PZU if the shares are not transferred, but no consequences for Deutsche Bank. If PZU fails to hand over its shares to Deutsche Bank, the insurer had to pay a penalty of $30 million, according to the agreement.
At the same time, the contract does not spell out what penalty Deutsche Bank would incur if it pulls out of the deal.
Deutsche Bank representatives visiting Poland last week said that the agreement does not violate any Polish law. "When we signed the contract to buy BIG BG shares from PZU, we had approval from the National Bank of Poland (NBP)," said Rolf Breuer, president of Deutsche Bank. "We acted within the rules and limits."
