The Bank Leumi (TASE:LUMI) tender offer got underway this evening, with NIS 60 billion in assets being offered for sale. Bank Leumi is offering its provident funds for NIS 32 billion, as well as the Psagot Ofek Investment House. Psagot Ofek has NIS 20 billion in funds under management, plus NIS 5.5 billion in portfolios under management.
The sale is being supervised by Bank Leumi first executive VP head of investment division Dov Gilboa, and Leumi & Co. deputy CEO and investment sector head Osnat Ronen. Leumi has requested that interest in the tender be expressed by tomorrow at 8 pm.
The bank is offering to sell, together or separately, the following four asset groups. The first group includes the massive Leumi-Otzma provident fund, and provident fund Taoz, with a total value of NIS 16 billion. The second group includes the remaining funds valued at NIS 13 billion. In addition, Leumi has made this sale conditional upon the inclusion of its provident fund operating system.
The third group includes the assets of Psagot Managers of Mutual Funds - Leumi Ltd., which may be sold together with, or separate from the portfolio management activity of Ofek Securities and Investments Ltd.
Leumi's presentation was attended by the major insurance companies and other interested parties. Excluded were Clal Insurance Enterprises Holdings Ltd. (TASE:CLIS) which, having acquired Israel Discount Bank's (TASE:DSCT) funds has reached the legal market share limit (15%) for the pension insurance sector.
The lead bidders for Leumi's funds are expected to be Migdal Insurance (TASE:MGDL), Harel Insurance Investments (TASE:HARL), and Markstone Capital Partners Fund via Solomon Capital Markets Ltd.
Migdal is the main contender for Psagot, although other entities may make reasonable offers as well. In the event that Migdal buys all or some Leumi provident funds, this will constitute a parties at interest deal requiring the approval of the general shareholders, as Leumi is a party at interest in Migdal.
Following the provident fund sale, Leumi will remain with a 66% share of Kahal Employees Supplementary Training Fund Ltd., which manages NIS 10.3 billion in advanced training fund assets. Kahal is owned by Bank Leumi (66%) and Bank Discount (33%). The banks have not yet agreed upon the method for selling off this fund.
Published by Globes [online], Israel business news - www.globes.co.il - on Sunday, November 20, 2005