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December 1st, 2008
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Warsaw bids on Prague bourse

Vienna, Germany and Nasdaq also interested in buying the BCPP

By Claire Compton
Staff Writer, The Prague Post
October 1st, 2008 issue

The Warsaw Stock Exchange (WSE) submitted a bid for a majority stake in the Prague Stock Exchange (BCPP), despite not meeting shareholders’ requirements and the BCPP’s CEO’s belief that the Polish buyer would “be the worst possible owner we can imagine.”
Petr Koblic made the comments on a Sept. 24 radio program when talks began in earnest about potential bidders, which include the Wiener Börse, Deutsche Börse and Nasdaq.
The Polish government owns 99 percent of the WSE and plans to sell 60 percent of its stake in the next months. BCPP shareholder requirements stipulate the new owner cannot be state owned, but WSE head Ludwik Sobolewski said the bid would be submitted anyway, as the bourse hopes to shore up its regional clout.
BCPP spokesman Jiří Kovařík said he had no comment at this stage in the process.
Analysts and shareholders said the new owner should develop the bourse rather than sell it for profit.
“The main point is to develop our stock exchange, an investor who would put some profits back into the exchange,” said Aleš Michl, an analyst with Raiffeisenbank.
The BCPP issued a press release Aug. 6 declaring the shareholders’ intention to initiate a sale of their shares because of “an increased interest of both financial and strategic investors,” as well as a global trend of consolidating stock markets.
Patria Finance, the biggest shareholder with a 25 percent stake, would benefit the most from the sale. The investment company saw its 2008 first-half profits fall 80 percent, and unloading shares would balance the loss. Other shareholders include Česká spořitelna with 14.7 percent and investment group Tiger Holding Four S.a.r.l. with 13.5 percent.
The bourse raised its net-consolidated profit one-third to 198.5 million Kč last year, but its sale value has been estimated at 5 billion–10 billion Kč ($301.9 million–603.9 million).
The global financial crisis should not have any major affect on the sale, said Michl.
“If there’s an investor who would like a loan to buy the stock exchange, that could be more expensive for them. They can pressure the owners to lower the price, but I do not expect the effect to be very important,” he said.
Wiener Börse head Michael Buhl told the Czech News Agency Sept. 24 that the crisis should not be an obstacle to the sale. The Vienna exchange acquired 81 percent of the Slovenian bourse this year and was recently granted permission by Hungarian financial supervisory authorities to buy 50.45 percent of the Budapest exchange. Buhl said the Vienna exchange would like to further develop the BCPP while it strengthens the significance of stock exchanges in Central and East Europe for foreign investors.

Claire Compton can be reached at ccompton@praguepost.com


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