Sources inform ''Globes'' that Israel Discount Bank (TASE: DSCT) will sell assets in accordance with the provisions of the Bachar capital market reforms.
This morning, Discount Bank published a lightening tender, in which it is offering to sell its provident funds, which have NIS 17 billion in assets, excluding the funds of the bank’s employees. It will also sell Ilanot Discount Ltd., its mutual funds management subsidiary, which manages NIS 14.6 billion in assets. The value of these assets, on the basis of recent deals, is NIS 1-1.2 billion.
Discount Bank asked six insurance companies and non-bank fund management companies and investment houses for offers, including Clal Insurance Enterprises Holdings Ltd. (TASE: CLIS) and Migdal Insurance and Financial Holdings Ltd. (TASE:MGDL), and E. Solomon Investment & Consultancy (1992) Ltd. (TASE:SOLO) (which sold its mutual funds business to Markstone Capital Partners Group LLC).
At first, the bank set a deadline for bids of 5 pm today, but deferred the deadline to tomorow afternoon following pressure from potential bidders.
Discount Bank declined to comment on the report.
Discount Bank VP Linda Ben-Shushan is handling the tender. In the tender for its provident funds, Discount Bank wants to receive offers for all the assets, and is asking for an five-year operating contract, in exchange for 0.15%.
Discount Bank wants two offers for its mutual funds. One is for all the mutual funds, and the other is for the acquisition of 45% of them. Under the second option, Discount Bank will receive a Put option for the sale of the rest of its holdings within two years.
Capital market sources believe that the main contenders will be Migdal, Clal Insurance, and Israel Phoenix Assurance Ltd. (TASE:PHOE1;PHOE5). Clal Insurance president and managing director Avigdor Kaplan recently rejected an offer to buy IDB Holding Corp. Ltd.’s (TASE:IDBH) 45% stake in Ilanot Discount at a company value of NIS 507 million. In the end, Discount Bank bought IDB’s stake in the company, which it is now offering for sale.
Published by Globes [online], Israel business news - www.globes.co.il - on November 7, 2005