UPDATE 1-KBC, Santander place shares in Polish BZ WBK
* KBC selling 16.2 pct stake, Santander up to 5.2
* Placement to meet requirement for 30 pct owned by others
* Priced at 240-270 zloty vs Friday close of 268.80 (Adds more details, banks involved)
BRUSSELS, March 18 (Reuters) - Belgium's KBC and the eurozone's biggest bank Santander began placing almost 20 million shares in Polish lender Bank Zachodni WBK worth some $1.70 billion with other investors.
KBC Bank said it was selling its remaining 16.2 percent stake, received as part of its deal to sell Polish unit Kredyt Bank to Santander, which merged Kredyt Bank with BZ WBK.
Santander, which holds a 75 percent stake in BZ WBK, will be placing between 0.2 and 5.2 percent.
As part of a deal with Polish regulators to win backing for the takeover, the Spanish lender agreed to reduce its BZ WBK stake to boost freefloat.
BZ WBK shares fell 2.3 percent in early trade to 262.50 zlotys, valuing the lender at some 25 billion zlotys ($7.9 billion).
Reuters data shows BZ WBK trades at 1.8 times its book value compared with the median of 1.4 times for its Polish rivals.
The offering will be priced at 240 to 270 Polish zloty.
The placement to institutional investors, running from Monday to no later than Thursday, is aimed at satisfying the Polish regulator's requirement that 30 percent of BZ WBK is in the hands of other minority investors by the end of 2014.
Deutsche Bank, Citi, Morgan Stanley, BofA Merrill Lynch, Credit Suisse, KBC Securities and Santander Investment are Joint Global Coordinators and Joint Bookrunners.
Dom Maklerski BZ WBK is Joint Global Coordinator, Joint Bookrunner and Offering Agent.
Goldman Sachs International and UBS Investment Bank are acting as Joint Bookrunners, while Dom Maklerski PKO BP, ING, Royal Bank of Canada and Societe Generale are Co-Lead Managers. ($1 = 3.1714 Polish zlotys) (Reporting By Philip Blenkinsop; Editing by Helen Massy-Beresford)