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May 12, 2010 2:59 PM

Polska! Four Firms Grab Roles on Europe's Largest IPO Since 2007

Posted by Brian Baxter

Poland's largest insurer, PZU, saw its share price soar on Wednesday in the first day of trading after the state-controlled company raised nearly $2.7 billion through an initial public offering, Bloomberg reports. The share sale is part of a larger effort by the Polish government to raise $10 billion this year to finance the country's budget deficit.

Thanks partly to Poland's privatization spree, the Warsaw stock exchange last year saw more IPOs than any other exchange in the world. PZU moved forward with its IPO despite the tragic death of Poland's president and several government ministers in an airplane crash last month, and the recent economic turmoil over the Greek debt crisis in the European Union. In the U.S., sources close to the PZU share sale say it was structured as a private placement, or Rule 144A transaction.

Jaroslaw Grzesiak, managing partner of the Warsaw office at Dewey & LeBoeuf, advised PZU on the offering along with capital markets partner Ireneusz Matusielanski, corporate cochair Joseph Ferraro, and local partners Lukasz Pawlak, Rafal Sienski, and Artur Zapala. The firm has advised PZU for more than a decade, most recently helping the insurer settle a long-standing dispute between its main shareholders, the Polish treasury and Dutch insurer Eureko.

The Polish government and Eureko had struggled over control of PZU since Eureko bought a 30 percent stake in the company in 1999. Talks aimed at resolving an international arbitration proceeding between the two parties broke off two years ago, before a settlement was finally reached last October. Sources say the settlement paved the way for the current IPO, in which the Polish treasury and Eureko together sold off a 30 percent stake in PZU.

Following PZU's shares sale Tuesday, the Polish government will now own 45 percent of the insurer, while Eureko will retain a 13 percent stake, according to Bloomberg. The nearly $1 trillion rescue package announced by the European Union last weekend helped calm the fears of investors in the IPO, say sources with knowledge of the PZU offering.

Maciej Jamka, administrative partner in charge of K&L Gates's brand new Warsaw office, advised the Polish treasury on the sale of its PZU stock along with capital markets partner Andrzej Mikosz and corporate partner Keith Snedden. The firm previously advised Poland in its settlement with Eureko in the arbitration dispute.

White & Case, which advised Eureko on the arbitration settlement, also represented the Dutch insurer on the sale of its PZU shares. M&A partner Witold Jurcewicz, local partner Marcin Studniarek in Warsaw, and capital markets partner Greg Stonefield in London led the White & Case team advising Eureko.

Capital markets partners Marcin Chylinski and Anna Frankowska with Weil, Gotshal & Manges's Warsaw office led a team from the firm advising underwriters Credit Suisse, Goldman Sachs, Morgan Stanley, and Deutsche Bank on the PZU offering. Pawel Rymarz, managing partner of Weil's Warsaw office, also provided legal advice along with capital markets partners Boris Dolgonos in New York and Peter King in London.

Bloomberg reports that the PZU sale is a good sign for the future of Polish privatizations, which have increased dramatically in recent years.

Last October, Poland's largest power group, PGE, announced a $1.7 billion IPO for a 15 percent stake in the company. In February 2009, Poland's third-largest power group, Enea, raised $370 million from an IPO for a 16 percent stake. Dewey took the lead for PGE and Enea on both those offerings.

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