Israel Discount Bank (TASE: DSCT) is leading a syndicate that includes Mizrahi Tefahot Bank (TASE:MZTF) and First International Bank of Israel (TASE: FTIN1;FTIN5) to fund Markstone Capital Partners Group LLC's purchase of mutual funds from Bank Hapoalim (LSE: BKHD; TASE: POLI). Sources told "Globes" that Markstone will fund half of the purchase from equity and the remaining NIS 1 billion, with bank loans. The purchase of mutual funds from Bank Leumi (TASE: LUMI) will be funded by Bank Hapoalim and Discount Bank. The purchase of Pekan Plus Ltd. from Bank Hapoalim was funded by a loan from Bank Leumi and Discount Bank.
Sources added that in order to receive the provident and advanced training funds as guarantees for the loan, the banks received a special approval from the Bank of Israel Banks Supervision Dept. and from the Ministry of Finance Supervisor of Capital Markets, Insurance and Savings to hold these assets if the need should arise. This was done to prevent a situation where the banks would need to exercise the guarantee and would be legally precluded from holding the assets (the mutual funds and provident funds.)
Markstone will purchase the provident and mutual funds from Bank Hapoalim and Bank Leumi for NIS 1.9 billion. Markstone acquired Pekan Plus from Bank Hapolaim for NIS 834 million (after price adjustments,) and some provident funds from Bank Leumi which manage NIS 14 billion in assets for NIS 473 million. Markstone managers are Ron Lubash and Amir Kess.
Markstone is also in the final stages of negotiations with Bank Hapoalim for the purchase of provident funds and advanced training funds (including Kinneret) which manage NIS 15 billion in assets and the Lahak Mutual Funds for NIS 600 million. Discount Bank will provide half of the NIS 300 million in financing for this acquisition, and Mizrahi Bank and First International will each provide one quarter.
Published by Globes [online], Israel business news - www.globes.co.il - on October 5, 2006
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