Bidding for AIB's Polish unit to start by end June
Published 01/05/2010 | 05:00
Potential buyers circling Allied Irish Bank's Polish unit are set to receive initial information on the bank within the next few weeks, with the first round of bidding expected to be completed by the end of June.
Bank Zachodni BWK, in which AIB has a 70.2pc stake, brought forward its latest set of figures by two weeks to yesterday to give suitors a clearer picture of current trading.
First-quarter net profit almost doubled to 233m zloty (€59.6m), meeting market expectations, as commission income rose and loan-loss provisions dropped.
Mateusz Morawiecki, Zachodni's chief executive, signalled yesterday that more news on possible buyers should be available in June or July.
At the end of March, AIB said it was selling Zachodni as well as its 22.5pc stake in US regional lender M&T Bank and its UK operations, comprising a business bank and its First Trust Bank network in Northern Ireland.
"We are currently working on an information memorandum," Mr Morawiecki.
"Thus we will be able to say who is really interested in buying the bank only after we know who took the memorandum."
But observers expect a large number of European banks to express an interest in Zachodni in order to get hold of the information memorandum.
AIB's advisers, Morgan Stanley and AIB Corporate Finance, will use the first round of bidding to weed out "tyre kickers" from more serious parties.
The narrowed list of bidders would then be given access to a "data room", allowing them to carry out due diligence on Zachodni.
Mr Morawiecki said the sale should be completed by the end of this year, or in the first quarter of 2011.
He said that talks with bidders were expected to be held through September.
Analysts see the sale of the business generating up to €2.9bn of the €7.4bn of capital AIB needs to raise by the end of the year to meet new regulatory capital requirements.
AIB chairman Dan O'Connor signalled to shareholders at the bank's annual general meeting during the week that he expected to announce multi-billion euro stock sale in September.
The money will plug the gap between the proceeds of the asset sales and the €7.4bn it must raise.
"As commented at its AGM this week, AIB will not be rushed into a sale of this prized (Polish) asset at a fire-sale price -- as the group only needs to have a disposal agreement in place by year-end," said Davy analyst Stephen Lyons.