Sources inform ''Globes'' that Super-Sol Ltd. (TASE:SAE; OTCBB:SSLTF) has opened negotiations to jointly issue credit cards with Isracard, owned by Bank Hapoalim (LSE:BKHD; TASE:POLI), even though Super-Sol recently announced that it would issue credit cards jointly with Leumicard, owned by Bank Leumi (TASE:LUMI).
The sources added that both Isracard and Leumicard proposed that Super-Sol enter into a partnership. Such a deal however, might not be carried out in future through Super-Sol, but through IDB Holding Corp. Ltd.’s (TASE:IDBH) financial arm, Clal Finance Batucha Ltd., or through IDB.
Bank Leumi responded harshly to a question today from “Globes” about a possible link-up between Super-Sol and Isracard, saying that the Leumicard already had an agreement with Super-Sol. “This is a breach of contract,” said sources close to the deal, and were confident that Super-Sol would not link up with their rival.
Two months ago, Super-Sol and Leumicard jointly announced that they planned to issue a joint credit card. Leumicard assumed that the agreement was closed, even though no contract has been signed yet. The delay is attributed to the workload of Super-Sol chairman Avraham Biger and CEO Effie Rosenhause following the acquisition of Clubmarket Marketing Chains Ltd..
Bank Leumi executive VP and head of marketing and strategic development Yona Fogel told “Globes”, “So far as I know, the deal with Super-Sol is closed and agreed upon. I can’t believe that Super-Sol will withdraw from its agreements with us.”
Attempts to issue credit cards for Israel’s supermarket chains have failed to date. None of the supermarket chains’ customers clubs include a credit card, and they do not generate profits for credit card companies. The Super-Sol-Leumicard deal created an equal partnership between the parties, which turned Super-Sol into an issuer of credit cards, and not merely a platform for credit card sales. This gives Super-Sol an incentive to boost credit card transactions.
Super-Sol and Isracard declined to comment on the report.
Published by Globes [online], Israel business news - www.globes.co.il - on January 17, 2006