Bank Hapoalim (LSE: BKHD; TASE: POLI) has initiated the sale of its Gadish and Tagmulim provident funds. Sources inform ''Globes'' that the bank is in talks with DS Apex Holdings Ltd. (TASE: DSAP) subsidiary DS Securities & Investments Ltd. (TASE:DSIN).
Gadish is Israel’s largest provident fund, managing NIS 20.4 billion in assets, but has suffered in recent years from poor performance and the loss of members. Tagmulim, a provident fund for IDF regular officers and NCOs, manages NIS 4.6 billion in assets, but charges no management fee. The sources added that Bank Hapoalim expects to get a price of 2.7% of Gadish’s assets, or NIS 550 million. Bank Hapoalim deputy general manager of international division Barry Ben-Zeev is handling the staff work.
DS Securities chairman Yaakov Elinav said in response, “As the leading provident funds company, DS examines, within the context of current market prices, many options for acquiring top quality provident funds.” Until 2003, Elinav was a Bank Hapoalim VP responsible for subsidiaries, and therefore knows Gadish and Tagmulim very well.
A source close to DS Apex Holdings confirmed the talks with Bank Hapoalim, but said there were disagreements over the price. “DS was not involved in the acquisition of provident funds when the prices were insane. Now that prices are reasonable, there’s something to talk about. Nevertheless, Bank Hapoalim’s asking price is high, and the question is how much it will come down,” he said, adding that DS Apex has the wherewithal to finance the acquisition of Gadish.
A senior capital market source said that there was a problem with Tagmulim, because it did not charge a management fee, and therefore did not cover its operating commissions, let alone the distribution fee, whose aggregate level reaches 0.35%. “Bank Hapoalim should pay Tagmulim’s buyer to take it,” he said.
Published by Globes [online], Israel business news - www.globes.co.il - on October 12, 2006
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