Poland's Treasury has short-listed four exchanges, Deutsche Boerse (DB1.XE), London Stock Exchange Group PLC (LSE.LN), Nasdaq OMX Group Inc. (NDAQ) and NYSE Euronext (NYX), to conduct due diligence on the Warsaw Stock Exchange, the ministry said Wednesday.

Poland's government plans to sell a majority stake in the Warsaw Stock Exchange, or Gielda Papierow Wartosciowych w Warszawie SA, by the end of 2009, as part of its ambitious privatization plan, which aims to raise 12 billion zlotys ($4 billion) this year.

The Polish government - keen to keep the ballooning of the budget deficit to a minimum in 2009 and 2010 - prefers to sell off state-owned companies, even if valuations are lower than in the pre-global credit crisis environment.

The exchange industry has experienced a wave of consolidation in recent years, including NYSE's acquisition of Euronext and Nasdaq's acquisition of OMX, though deals have taken a pause during the economic downturn.

The Treasury wants to sell a stake of 51% to 73.82% in the exchange, which itself has played a key role since 1989 in the privatization of communist-era state-owned companies during Poland's transition to capitalism.

A spokesman for the London Stock Exchange Group PLC (LSE.LN) said: "We always look for opportunities, and we're engaged in the Warsaw Stock Exchange's process." The other short-listed exchanges weren't immediately reachable for comment.

Members of the Warsaw Stock Exchange will also be invited to make offers for stakes of 0.5% to 10% in the exchange, from a 22.82%-plus-one-share stake earmarked for them, the Treasury said.

There are 375 companies listed on the Warsaw Stock Exchange, which have a total market capitalization of PLN570.73 billion. The exchange booked about PLN90 million to PLN95 million net profit in 2008, according to the daily Parkiet.

Using a price-to-earnings ratio of 20, the multiple used during the sale of Prague Bourse, WSE is worth around PLN3 billion, Deputy Treasury Minister Joanna Schmid said early this year.

At the current lower P/E of 7, the value would be below PLN1 billion, according to calculations in an article in the April issue of Forbes' Polish-language edition.

In addition to price, the Treasury will likely use other criteria when deciding on the buyer.

"The investor must ensure the development of the capital market in Poland and strengthen the WSE's position in the region," Schmid said.

Treasury Ministry Web site: www.msp.gov.pl

WSE Web site: www.gpw.pl

-By Marynia Kruk, Dow Jones Newswires; +48 22 447-2431; marynia.kruk@dowjones.com

(Vladimir Guevarra in London contributed to this report.)