PBR bidding intensifies
S-E-Banken's bid followed two offers by Bank Rozwoju Eksportu (BRE) - on April 17 at zl. 24.3 and on April 2 at zl. 22.5 - for 100% of PBR. BRE said it will make its third offer next week.
A third contender, Bayerische Landesbank (BLB), also plans to make a bid for the bank, but first must get the approval of the Securities Commission (KPWiG).
"We are still interested in PBR," said a source in BLB. "We won't pull out of the deal."
PBR traded at around zl. 20 before the bidding war began. But analysts said the current bid of zl. 28 is too high. So should investors sell?
"I would tell them to wait a little bit more, but to me, 28 is already absurd," said Artur Szeski, an analyst with CDM Pekao. "And it has nothing to do with the bank's value."
At zl. 28, PBR has a price-to-earnings ratio of 15, while banking stocks as a whole were trading around 9 in mid-April.
Marek Juras, an analyst with Erste Polska, said that while he does not think the price is "absurd," he also does not think the bids will go much higher.
"Any price above zl. 30 wouldn't be justified by the bank's fundamentals," he said.
While BRE may be willing to top S-E-Banken's offer, Juras said that doing so would not be in BRE's best interest.
"Going any further will be damaging the shareholder value," he said.
On the other hand, S-E-Banken and BLB may be willing to pay a high premium for the bank simply because it will quickly give them a presence on the Polish market. While PBR only has two branches, at the end of 1997 it had total assets of zl. 1.8 billion ($562,500 million).
One of PBR's shareholders, Citibank, which owns 7%, already decided to take BRE up on its second offer. If BRE ups its price, however, Citibank will be entitled to the higher amount.
PBR's other shareholders include Powszechny Bank Kredytowy (PBK) with 33%, the Industrial Development Agency with 15% and the State Treasury with 30%.
A third contender, Bayerische Landesbank (BLB), also plans to make a bid for the bank, but first must get the approval of the Securities Commission (KPWiG).
"We are still interested in PBR," said a source in BLB. "We won't pull out of the deal."
PBR traded at around zl. 20 before the bidding war began. But analysts said the current bid of zl. 28 is too high. So should investors sell?
"I would tell them to wait a little bit more, but to me, 28 is already absurd," said Artur Szeski, an analyst with CDM Pekao. "And it has nothing to do with the bank's value."
At zl. 28, PBR has a price-to-earnings ratio of 15, while banking stocks as a whole were trading around 9 in mid-April.
Marek Juras, an analyst with Erste Polska, said that while he does not think the price is "absurd," he also does not think the bids will go much higher.
"Any price above zl. 30 wouldn't be justified by the bank's fundamentals," he said.
While BRE may be willing to top S-E-Banken's offer, Juras said that doing so would not be in BRE's best interest.
"Going any further will be damaging the shareholder value," he said.
On the other hand, S-E-Banken and BLB may be willing to pay a high premium for the bank simply because it will quickly give them a presence on the Polish market. While PBR only has two branches, at the end of 1997 it had total assets of zl. 1.8 billion ($562,500 million).
One of PBR's shareholders, Citibank, which owns 7%, already decided to take BRE up on its second offer. If BRE ups its price, however, Citibank will be entitled to the higher amount.
PBR's other shareholders include Powszechny Bank Kredytowy (PBK) with 33%, the Industrial Development Agency with 15% and the State Treasury with 30%.
