Bank Hapoalim will post a NIS 255 million capital gain on the sale.
Bank Hapoalim (LSE: BKHD; TASE: POLI) has met Bank Israel’s deadline. Following a pricing procedure that lasted all last night, Bank Hapoalim sold its 68% stake in Bank Otsar Hahayal to First International Bank of Israel (TASE: FTIN1;FTIN5). The Bank of Israel previously ordered Bank Hapoalim to sell its Bank Otsar Hahayal stake by February 2. Had the sale not taken place by that date, the Bank of Israel would have carried out the sale itself.
The sale price was NIS 703 million, reflecting a value for Bank Otsar Hahayal equal to 185% of its equity. Bank Hapoalim will post a NIS 255 million capital gain on the sale. Bank Hapoalim’s announcement indicates that Bank Otsar Hahayal will continue to use credit cards issued by Bank Hapoalim subsidiary Isracard.
In the sale agreement, First International Bank also undertook not to merge Bank Otsar Hahayal for five years, and to honor the collective agreement with the latter’s workers. Bank Otsar Hahayal also gave its tenured workers a grant equal to five months’ pay.
Published by Globes [online] - www.globes.co.il - on January 24, 2006