Poland’s open pension funds (OFEs) and voluntary pensions funds (DFEs) have scored a significant corporate governance victory in their battle to secure an improved share price offer from Dutch-registered Global City Holdings (GCH) as the entertainment and real estate company moves to delist from the Warsaw Stock Exchange.

On 9 June, GCH announced a tender offer for the outstanding 42.5% of its shares at a purchase price of PLN47.7 (€11.5), well above the PLN40 first recommended in February by the company’s board and its majority shareholder, Israel-based IT International Theatres.

The subscription period for the tender offer lasts from 29 June to 22 July.

The PLN40 price was based on the previous six months’ trading.

However, four OFEs (Aviva, ING, Nordea and PZU), and two DFEs (ING and Nordea), which collectively own 26.6% of GCH’s shares, argued that it did not value the company fairly and banded together to push for better terms.

Andrzej Sołdek, chairman of the board at PTE PZU, explained that, based on a valuation of GCH’s assets – Cineworld (listed on the London Stock Exchange), its cash holdings, the stock value of GCH itself in Warsaw and other assets – the company was worth more than PLN40.

“To protect the interests of our clients, we couldn’t accept this,” he told IPE.

On 9 June, the pension coalition notified GCH that it would “subscribe for the sale of all of the shares held by it in the Company, in the tender offer announced by the Company, at a price of not less than PLN 47.70 without undue delay”.

The new price even exceeds the share’s peak close, prior to the recent announcement, of PLN45.1.

Since the announcement, the share price has shot up by around 12%.

The company’s move follows on from the WSE management board’s resolution at the end of May to allow GCH to delist provided that the majority shareholder(s) announces a tender offer for the sale of the company’s shares by all the remaining shareholders.

The GCH’s governing body would also have to adopt a delisting resolution with a majority of four-fifths of the votes cast in the presence of shareholders representing at least half the share capital.

The Dutch company has its sole listing in Warsaw.

While Polish public trading law specifies a four-fifths shareholder delisting approval only for domestic listings and foreign companies with dual listings, the WSE in this case applied a communiqué it issued in March that extended this shareholder approval to all its listings.

The exchange, which argued that delisting could only proceed if the rights of shareholders, particularly minority shareholders, were protected, gave GCH six months to comply with the two conditions.

For the pension funds, the case is an important precedent.

While they have united before on matters such as rights issues and takeovers, this is the first time they have formed a coalition over a single-listed company seeking to leave the WSE.

“Any foreign company that wants to delist will now have to do so on the same terms as a Polish company,” said Sołdek.

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