BRE sells BIG stake, booking huge profit
BRE sold its 9.9% holding to investment company RZB Central European Development, which is registered in Malta, in an off-market transaction for zł. 12 a share.
BRE had jumped into BIG shares in March and April when the bank suddenly went into play and the share price started to spiral. Analysts estimated that BRE earned about zł. 6 per share, or zł. 252 million ($63 million) on the transaction.
The question now is on whose behalf RZB bought the shares. It is not believed that the investment company bought the shares for its own account. "Somebody is parking the shares, it's obvious," said Paweł Szymański, a banking analyst with London-based Schroders.
The main suspect as the ultimate purchaser of the shares is Deutsche Bank. The bank already has almost 9.9% of shares in BIG BG and at the end of April applied to the Banking Supervisory Commission (KNB) for a permit to increase its stake to 25%. It is still awaiting a decision on the request.
At the same time, Deutsche Bank agreed to buy zł. 150 million-zł. 200 million-($37.5 million-$50 million) of a new share issue from ailing Bank Wspołpracy Gospodarczej (BWR). After taking the new shares, Deutsche would hold 80% of BWR.
That deal gave rise to speculation that Deutsche had agreed to invest in BWR to please both the Securities Commission (KPWiG) and KNB, which both preferred to find an investor rather than to see a public bank go bankrupt.
Deutsche officials denied they had anything to do with being behind the sale of BRE's package in BIG BG.
"I don't know anything about it," said Hubert Janiszewski, managing director of Bankers Trust Polska, Deutsche Bank's investment arm. "I wish I knew."
And Deutsche wasn't the only suspect as the ultimate share purchaser. Some analysts pointed to Powszechny Zakład Ubezpieczeń (PZU). PZU is already a shareholder in BIG BG (PZU and PZU Życie together hold 6.8% in BIG BG).
The theory runs that BIG BG is trying to arrange a cross-shareholding arrangement with PZU. Together with insurer Eureko, its partner in the Ego pension fund and a 4% shareholder, and Bank of America, BIG is bidding for a 30% stake in PZU. If all the transactions work out, BIG would own part of PZU and the insurer would own part of BIG.
"That could be a move toward creating a banking-insurance group," said one analyst who asked not to be named.
But "to take part in the tender is still far from becoming an investor," said Wojciech Kaczorowski, public relations department director at BIG BG.
"I guess we have to be patient for a few more days before we will see who was the buyer," Janiszewski said.
BRE had jumped into BIG shares in March and April when the bank suddenly went into play and the share price started to spiral. Analysts estimated that BRE earned about zł. 6 per share, or zł. 252 million ($63 million) on the transaction.
The question now is on whose behalf RZB bought the shares. It is not believed that the investment company bought the shares for its own account. "Somebody is parking the shares, it's obvious," said Paweł Szymański, a banking analyst with London-based Schroders.
The main suspect as the ultimate purchaser of the shares is Deutsche Bank. The bank already has almost 9.9% of shares in BIG BG and at the end of April applied to the Banking Supervisory Commission (KNB) for a permit to increase its stake to 25%. It is still awaiting a decision on the request.
At the same time, Deutsche Bank agreed to buy zł. 150 million-zł. 200 million-($37.5 million-$50 million) of a new share issue from ailing Bank Wspołpracy Gospodarczej (BWR). After taking the new shares, Deutsche would hold 80% of BWR.
That deal gave rise to speculation that Deutsche had agreed to invest in BWR to please both the Securities Commission (KPWiG) and KNB, which both preferred to find an investor rather than to see a public bank go bankrupt.
Deutsche officials denied they had anything to do with being behind the sale of BRE's package in BIG BG.
"I don't know anything about it," said Hubert Janiszewski, managing director of Bankers Trust Polska, Deutsche Bank's investment arm. "I wish I knew."
And Deutsche wasn't the only suspect as the ultimate share purchaser. Some analysts pointed to Powszechny Zakład Ubezpieczeń (PZU). PZU is already a shareholder in BIG BG (PZU and PZU Życie together hold 6.8% in BIG BG).
The theory runs that BIG BG is trying to arrange a cross-shareholding arrangement with PZU. Together with insurer Eureko, its partner in the Ego pension fund and a 4% shareholder, and Bank of America, BIG is bidding for a 30% stake in PZU. If all the transactions work out, BIG would own part of PZU and the insurer would own part of BIG.
"That could be a move toward creating a banking-insurance group," said one analyst who asked not to be named.
But "to take part in the tender is still far from becoming an investor," said Wojciech Kaczorowski, public relations department director at BIG BG.
"I guess we have to be patient for a few more days before we will see who was the buyer," Janiszewski said.
