Unicredit sold the Pekao bank. The banking group announced that it has reached an agreement with Powszechny Zaklad Ubezpieczen SA (Pzu) and Polski Fundusz Rozwoju SA (Pfr) for the sale of a stake equal to 32,8 percent of the Polish bank's share capital at a price of 123 PLN per share or PLN 10,6 billion (equivalent to Euro 2,4 billion at the current exchange rate) corresponding to 1,42 times the shareholders' equity as at 30 September 2016.
The transaction is expected to close in mid-2017 and is subject to regulatory and antitrust approvals.
Unicredit's exit from Pekao takes place in two ways. In addition to the sale of 32,8%, in fact, Unicredit launches a market operation on the residual 7,3% stake "through the issue of equity-linked certificates - explains the bank - guaranteed by a pledge on Pekao shares". This second step kicks off an offer of 1.916 secured equity-linked certificates, with a total reference amount of approximately 500 million euros, “with mandatory settlement in ordinary shares of the Company on or before December 15, 2019. The certificates – continues the press release – will allow UniCredit to obtain the transfer on the date of expiry (except in the case of early settlement) of the remaining stake, equal to 7,3% of the capital of Pekao (calculated assuming the completion of the M&A Transaction) and to maintain an exposure to the potential appreciation of the Shares due to the additional value that may be contributed by Pzu and Pfr following the completion of the acquisition”.
At the time of issue, the certificates will have a number of reference shares equal to 10.000 each and will be offered at an issue price between 85,35% and 86,35% of the reference notional amount. They will pay no coupon and will entitle holders to receive a net cash amount equal to 81% of the gross amount of dividends and other distributions paid in respect of the underlying shares. The minimum settlement price will be equal to the weighted average price for the volumes of
Shares on 9 December 2016, converted into euro (“Reference Price”). The maximum price will be fixed by applying a premium of between 15 and 17 per cent on the reference price. The result of the placement and the final economic terms of the certificates will be determined and announced on the same day and the settlement date is expected to be on or around December 15, 2016.
The group assesses that the operation will have a positive impact of around 55 basis points on CET1 ratio of the UniCredit Group as at September 30, 2016. Furthermore, the sale of the residual stake in Pekao of 7,3% through the certificates will generate a positive impact on capital on their maturity date. The operation is part of the new strategic plan approved with the arrival of Jean Pierre Mustier at the helm of UniCredit, the results of which will be communicated on the Capital Markets Day scheduled in London on Tuesday 13 December. And it will allow the group to reduce the amount of the upcoming capital increase already planned.
In addition, UniCredit has agreed with Pzu and Pfr the sale of further stakes in the group's Polish companies: Pioneer Pekao Investment Management SA, Pekao Pioneer PTE SA and Dom Inwestycyjny Xelion SP. Z OO, for a total price equal to
PLN 634 million (equivalent to Euro 142 million at the current exchange rate). Finally, the parties agreed to negotiate a commercial agreement to provide support to UniCredit's customers who have access to the Polish market, in line with best market practices and the Company's high standards.
The Pekao operation is part of the strategic review announced in July “and I am satisfied – commented the managing director Jean Pierre Mustier – that an agreement has been reached with PZU and PFR for the sale of the stake in Pekao. At the same time, the operation will allow customers to continue to receive the same level of service quality that Pekao has always guaranteed. Thanks to PZU's proven experience in the financial services sector in Poland and the decisive role of PFR in supporting the development of the country's economy.”
For the Transaction, UniCredit made use of Morgan Stanley, UBS Investment Bank and UniCredit Corporate & Investment Banking as financial advisors while Weil, Gotshal & Manges acted as legal advisors.
