Warsaw Stock Exchange rules on delisting foreign companies cast a shadow on central Europe’s largest equity market, dampening investors’ interest in overseas share sales, Aviva PTE SA, Poland’s second-largest pension fund, said.
Aviva and three other Polish funds are seeking to block a plan by Rotterdam-based cinema operator Global City Holdings NV to withdraw its trading from the Warsaw bourse. Even as the funds together own more than the required 20 percent stake to block a delisting under Polish law, they are unable to stop the plan as the local regulations don’t apply to foreign companies.
“The Warsaw bourse should set clear rules” on delisting foreign companies, Aviva PTE Chief Investment Officer Marcin Zoltek said in an interview in Warsaw on Friday. “The best solution would be an obligation to buy a big enough stake in a company in a public bid before delisting the stock.”
Fifty-one foreign companies are currently traded on the Warsaw Stock Exchange. Apart from Global City, Polish delisting regulations don’t apply to several other foreign companies including car-parts maker Automotive Components Europe SA and Avia Solutions Group AB as the Warsaw bourse is the sole market for their stock trading.
Potential delistings by foreign companies should protect the rights of minority shareholders to a similar degree as Polish-based companies on the Warsaw exchange, the bourse said in a statement today. Piotr Wojtaszek, a spokesman for Global City, had no immediate comment when reached by phone.
Aviva said the buyout price proposed by Global City at about 40 zloty per share is too low as it does not reflect its “fundamentals.” The stock was little changed at 41.2 zloty on 13 March, valuing the company at 2.1 billion zloty ($531 million). I.T. International Theaters Ltd, which owns a 54.8 percent stake, backed the delisting plan, Global City said in February.
The Warsaw exchange may make additional demands from a company before approving its delisting, according to its internal regulations.
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