Polish finance minister says fair price for UniCredit's Pekao stake includes premium

CERNOBBIO, Italy (Reuters) - The Polish government favours a purchase of UniCredit's CRDI.MI Polish lender Bank Pekao PEO.WA by domestic insurer PZU PZU.WA but the price must be fair, the finance minister said on Saturday.

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Italy's largest bank by assets UniCredit CRDI.MI is mulling the sale of a number of assets, including its 40.1 percent stake in Pekao, as it seeks to bolster its balance sheet and limit the size of a capital increase many analysts see as inevitable.

Sources have said PZU, Poland’s biggest insurer, is in talks with UniCredit over a possible deal but according to press reports the two sides are haggling over price.

Speaking on the sidelines of the Ambrosetti Forum in northern Italy, Polish Finance Minister Pawel Szalamacha said a fair price for UniCredit’s stake in Pekao, the country’s second biggest bank, included a premium because it would grant control over the lender.

UniCredit’s holding is currently worth about 3.1 billion euros ($3.46 billion) on the Warsaw stock exchange.

The negotiations are part of the Polish government’s wider agenda of taking back control of the country’s banking sector, which is majority-owned by foreign investors.

Szalamacha said it was only natural for PZU to be interested in Pekao, but he stressed that it was up to the two groups to decide on any deal.

“We would view such a deal positively if it happens, but we are not willing to force anybody to do a deal at any price,” Szalamacha told Reuters in an interview. “The price needs to be fair, obviously with a premium for control.”

He described Pekao as a bank “in good shape, clean” but said he did not think PZU faced the risk of possible rival bids.

“I don’t think there are rivals or other major international groups interested in it now,” he said.

“It’s up to the Italian group to decide what is the best course of action for them to raise additional capital because they do have concerns, out of courtesy I will obviously not discuss this in detail.”

He added that UniCredit, led by newly appointed CEO Jean-Pierre Mustier, had “several options on the table,” without elaborating.

Szalamacha also said that he expected rating agency Moody’s to leave its credit rating for Poland stable at A2, with a negative outlook, at its next review on Sept. 9.

He said he saw no risk that the budget deficit could overshoot the European Union’s 3 percent of gross domestic product budget ceiling next year, despite slower than expected economic growth. It is currently forecast at 2.9 percent of GDP.

“Our draft budget (for 2017) is on the safe side,” he said.

Editing by Angus MacSwan