UPDATE: Poland Short-Lists 4 In Bourse Privatization
July 22 2009 - 7:39AM
Dow Jones News
Poland's Treasury has short-listed four exchanges, Deutsche
Boerse (DB1.XE), London Stock Exchange Group PLC (LSE.LN), Nasdaq
OMX Group Inc (NDAQ) and NYSE Euronext (NYX), to conduct due
diligence on the Warsaw Stock Exchange, the ministry said
Wednesday.
Poland's government plans to sell a majority stake in the Warsaw
Stock Exchange, or Gielda Papierow Wartosciowych w Warszawie SA, by
the end of 2009, as part of its ambitious privatization plan, which
aims to raise 12 billion zlotys ($4.0 billion) this year.
The Polish government -- keen to keep the ballooning of the
budget deficit to a minimum in 2009 and 2010 -- prefers to sell off
state-owned companies, even if the valuations are lower compared to
the time before the global credit crisis set in.
The exchange industry has experienced a wave of consolidation in
recent years, including NYSE's acquisition of Euronext and Nasdaq's
acquisition of OMX, though deals have taken a pause during the
current global economic downturn.
The Treasury wants to sell a stake of between 51% and 73.82% in
the exchange, which itself has played a key role since 1989 in the
privatization of communist-era state-owned companies during
Poland's transition to capitalism.
Members of the Warsaw Stock Exchange will also be invited to
make offers for stakes of between 0.5% and 10% in the exchange,
from a 22.82%-plus-one-share stake earmarked for them, the Treasury
said in a statement.
There are 375 companies listed on the Warsaw Stock Exchange,
which have a total market capitalization of PLN570.73 billion. The
exchange booked about PLN90 milllion to PLN95 million net profit in
2008, according to daily Parkiet.
Using a price-to-earnings ratio of 20, the multiple used during
the sale of Prague Bourse, WSE is worth around 3 billion zlotys,
Deputy Treasury Minister Joanna Schmid said early this year.
At today's lower P/E of 7, the value would be below 1 billion
zlotys, according to calculations in a Forbes report on Poland in
March 2009.
In addition to price, the Treasury Ministry will likely use
other criteria when deciding on the buyer.
"The investor must ensure the development of the capital market
in Poland and strengthen the WSE's position in the region," Schmid
said.
Treasury Ministry Web site: www.msp.gov.pl
WSE website: www.gpw.pl
-By Marynia Kruk, Dow Jones Newswires; +48 22 447-2431; marynia.kruk@dowjones.com
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