Poland: a dealmaker's dream

Poland: a dealmaker's dream

Published: July 7, 2011

Troubles for Europe? Someone forgot to tell the Poles. In the space of just one week, Poland has produced two standout capital market transactions – a leveraged buy-out the likes of which has not been seen since the onset of the global crisis, and another mammoth initial public offering on the Warsaw Stock Exchange.

Late last week, Zygmunt Solorz-Zak, a Polish billionaire and the entrepreneur behind digital broadcaster Cyfroy Polsat, paid more than PLN18bn (about US$6.5bn) to take over Polkomtel, the country’s second largest mobile network operator. The businessman saw off competition from private equity from Apax Partners and Nordic telecoms group Telenor.

The deal is the biggest buy-out in Europe for the past three years and one of the biggest deals in the region’s telecom sector. The funding package includes a syndicated facility drawing in Deutsche Bank, Credit Agricole, Royal Bank of Scotland, Société Générale and PKO, while legal advice came from an array of firms including Dewey & LeBoeuf.

The scale of the deal is enormous and, with sellers including power group PGE and mobile group Vodafone jostling to ensure their own needs were met, talk of a final, 40-hour session to take the deal across the finishing line is understandable. But the pain should be worthwhile – advisers behind the deal tell EMEA Finance that it could now open the M&A market for other high-profile deals.

Poland’s equity markets hardly need re-opening. The Warsaw exchange has been a hotbed of IPO activity even during the downturn. On Wednesday July 8, it saw the country’s largest IPO so far this year – the PLN5.4bn (US$1.97bn) privatisation-listing of a 33% stake in coal producer Jastrzębska Spółka Węglowa (JSW).

The deal attracted more than 168,000 retail investors and was led by Citigroup, Goldman Sachs, JP Morgan Chase and UniCredit as global coordinators and bookrunners on the deal. Thanks to the eager take-up, the Polish treasury has raised about a third of its budgetary target for the year in this one transaction.

One monster IPO and a mega buy-out centred on a huge debt package – Polish dealmakers have had a good week. What’s more impressive is that many are confident there will be plenty of other highlights to come.