Poland's Alior Bank has agreed to buy Bank BPH from General Electric for 1.225 billion zloty ($329 million) and said it will look to make another acquisition this year after moving into the country's top 10. Alior said on Friday it plans to finalise the purchase of BPH's core business this year, marking its largest take-over since it was forged from scratch in 2007. The deal is part of GE's plans to sell around $200 billion worth of businesses world-wide by the end of 2016.
"We will be ready for (new) negotiations in the third quarter, if anything is put up for sale," Alior's Chief Executive Officer Wojciech Sobieraj told reporters. Alior, which is controlled by state-run insurer PZU , forms part Poland's ruling conservative Law and Justice (PiS) party's plans to regain more control over the country's banking sector, currently 60 percent foreign-owned.
PZU plans to build Poland's fifth-largest bank through Alior, which will raise its assets to 60 billion zlotys and move to the No 9 spot by assets with the BPH buy. Sobieraj declined to comment on market speculation that Alior has set it sights on Austrian Raiffeisen's Polish unit, which is up for sale and would double its assets. Alior plans a rights issue worth more than 1.52 billion zlotys to finance the BPH take-over, buy out minority shareholders and boost its capital. PZU has said it will buy into the issue.
Shares in the lender, which has a market capitalisation of 4.67 billion zlotys, jumped by up to 5.7 percent, with investors cheering the BPH buy. This was valued at a 0.93 price-to-book ratio, whereas the Polish banking sector average is almost 1.4. "It is a good transaction for both Alior and PZU. From Alior's perspective, looking at synergies and price, the multiple looks reasonable," said Kamil Stolarski, an analyst with Haitong Bank. Alior, which ended 2015 with a net profit of 309 million zlotys, expects overall synergies of 460 million zlotys annually thanks to adding BPH. The transaction excludes BPH's $3.9 billion mortgage portfolio and its asset management arm, which GE will retain.