Eureko Acquires More Shares in PZU

January 26, 2006

Eureko, the European insurance consortium, announced that it has reached agreement to acquire an additional 4.33 percent of shares in Polish insurer Powszechny Zaklad Ubezpieczen (PZU) from Manchester Securities Corporation.

Eureko said it “has already completed purchase of a first tranche of 1.2 percent, taking its current shareholding to the threshold of 33 percent, minus 1 share.”

The battle over PZU between Eureko and various Polish governments has been going on for five years. Originally Eureko had an agreement to manage Poland’s largest insurer from its position as a minority shareholder. This broke down when the government changed, and cancelled the arrangement, but through arbitration and negotiation a new agreement eventually emerged.

Eureko has now indicated that it will “submit a notification to the Polish Insurance and Pension Funds Supervisory Commission, in order to go beyond the threshold of 33 percent, and be able to exercise up to 50 percent of the votes at the PZU shareholders’ meeting.”

The bulletin added: “As Eureko will meet the requirements established by Polish law, we expect that, after expiration of the 3-month period, Eureko will complete purchase of the remaining 3.13 percent of the shares it has agreed to acquire. On completion of the transaction, Eureko’s shareholding in PZU will be 36.1 percent, with the binding agreement to acquire a further 21 percent at PZU’s flotation still in place.” It’s been ‘in place’ for at least four years, but hasn’t been completed yet, due to the dispute.

Ernst Jansen, Vice Chairman of Eureko, commented: “We have taken this step because of our undiminished commitment to our investment in PZU and in Poland, as well as having a firm conviction that the dispute between Eureko and the Polish State can be resolved.”

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