After a seven-month delay, the Bank of Israel last Thursday granted First International Bank of Israel (TASE: FTIN1;FTIN5) a control permit for Bank Otsar Hahayal. The closing of the acquisition was subsequently scheduled for Thursday, and Bank Hapoalim (LSE: BKHD; TASE: POLI) will transfer the bank to First International Bank, controlled by Zadik Bino.
Bank Hapoalim accepted an option to receive part of the price for Bank Otsar Hahayal in the form First International Bank’s share in the bank syndicate that provided credit for Gad Zeevi’s Zeevi Group, backed by Bezeq The Israeli Telecommunication Co. Ltd. (TASE: BEZQ) shares. The syndicate foreclosed the shares when Gad Zeevi defaulted on the loan. In effect, Bank Hapoalim obtained an option to buy 2.82% of Bezeq, First International’s share of Bezeq held as a lien. The Bezeq shares are currently worth NIS 400 million, which will finance most of First International Bank’s takeover of Bank Otsar Hahayal.
Bank Hapoalim said, “No decision has been taken yet.”
Banking sources believe that Bank Hapoalim will exercise this option, as part of its policy to increase non-financial holdings. If the bank exercises the option, it will become the second largest shareholder in Bezeq, with an 8.5% stake. Bezeq’s largest shareholder is Ap-Sab-Ar Holdings Ltd. (the Apax Partners-Saban Capital Group Inc.-Arkin consortium), with a 30% stake). If Bank Hapoalim exercises the option, First International Bank will record a capital gain of NIS 28 million on the difference between the NIS 5.12 per share value at which it records the Bezeq shares and Bezeq’s current share price.
Published by Globes [online], Israel business news - www.globes.co.il - on August 14, 2006
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