UPDATE 2-Poland's largest non-state IPO values Alior at $1.2 bln

Wed Dec 5, 2012 7:52pm GMT

* Selling 12.33 mln new shares as part of offer

* Raises 700 mln zlotys for expansion

* Poland's largest IPO by non-state company (Adds detail on valuation, demand, bookrunners)

By Chris Borowski and Kylie MacLellan

WARSAW/LONDON, Dec 5 (Reuters) - Polish bank Alior will raise 2.1 billion zlotys ($665 million) for itself and its owners in an initial public share offer which was priced on Wednesday, valuing the bank at around 3.6 bilion zlotys ($1.2 billion).

Alior, which was set up in 2008 and has built Poland's third-largest branch network with more than 1.3 million customers, priced its shares at 57 zlotys, the low end of the company's price range according to market sources. In its prospectus the company had set a maximum price of 71 zlotys.

The sale, Poland's largest ever non-state IPO, offered a rare opportunity to acquire a major stake in a bank in Europe's only economy to have avoided recession since the global financial crisis began four years ago.

Poland's banking sector, which has been largely unaffected by bad loans, is around 70 percent owned by foreigners.

Alior, owned by the Zaleski family through its holding company Carlo Tassara, said on Wednesday it would sell 12.33 million new shares, or nearly a fifth of its increased capital. From the proceeds to be shared between itself and its owners, 700 million zlotys will be used to strengthen the bank's own capital position and continue its expansion.

Alior is also selling 24.48 million existing shares and will transfer another 3.71 million to managers.

Around half of the shares were sold to international investors, with strongest interest from UK and U.S. funds, a source close to the deal said. Around 7 percent of the shares were allocated to domestic retail investors.

Alior, a well-known brand thanks to its quirky advertising featuring bankers in bowler hats, is a rarity among Europe's financial sector in seeking to raise funds from a public listing during the euro zone debt crisis.

Investors said they were attracted by the fact it was a young bank with an experienced management team, the source said, as well as the planned use of much of the money raised to grow the bank further.

Although Poland's banking sector has performed relatively well in recent years and Alior boasts rapid expansion since its launch five years ago, the offer w a s priced at around a 20 percent discount to the book value of Polish peers PKO BP and Pekao, largely due to the fact it is much smaller, the source said.

After months of inactivity, Europe has seen a pick-up in share sales since September, but the market is far from robust and investors remain choosy about which firms they will back and at what price.

Russian mobile operator MegaFon last week also priced its offering at the bottom of its range, while Italian airport operator SEA scrapped its listing.

Alior shares will debut on the Warsaw bourse by Dec. 14.

Barclays, J.P. Morgan and Morgan Stanley were joint global coordinators and bookrunners on the offering. ($1 = 3.1575 Polish zlotys) (Editing by Elaine Hardcastle and Greg Mahlich)

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