Government protective of WSE

The Treasury Ministry has set out a list of tough conditions for Deutsche Börse to meet before it agrees on the sale of the Warsaw Stock Exchange. The German exchange is the lone bidder for a majority stake hold in the WSE.

If Deutsche Börse does end up with a controlling stake, the Polish government wants to be sure that it will continue to build on the WSE's status as the largest bourse in Central and Eastern Europe.

The ministry has reportedly sent a list of questions to Deutsche Börse which are believed to focus on the ministry's desire for the WSE to retain autonomy and to be able to make decisions regarding Polish stocks.

The Polish government would also like to see Deutsche Börse continue investing in the WSE for a period of 10 years and hopes the bourse's IPO will be held in Warsaw.

The Treasury Ministry's press office would not disclose further details. "Analysis of the offer is still being conducted. Negotiations will start afterwards," a representative of the Treasury told WBJ.

Although four exchanges were invited to bid, Deutsche Börse was the only one to submit a binding offer for a 51 percent stake in the WSE. Pekao and Banco Espirito Santo de Investimento have also bid for minority stakes.

Treasury Minister Aleksander Grad has frequently stated that he will not privatize the WSE for just any price. The deadline for bids has been postponed twice and the government has left itself time for negotiations. Therefore Mr Grad does not expect revenues from the transaction to appear this year.

According to former WSE president Wiesław Rozłucki, the transaction would attract more firms to the WSE and provide it access to the German bourse's global network of customers.

"With just one bidder, Minister Grad is undoubtedly in a difficult situation. If it is not possible to negotiate good conditions it will be time to think about an alternative," he told Polska The Times.

Marcin Poznań