Bank Leumi (TASE: LUMI) and Markstone Capital Partners Group LLC today announced that, following their agreement from November 2005, they have signed a contract for the sale of provident funds managed by Leumi Gemel Ltd. to Markstone subsidiary Prisma Capital Markets Ltd. for NIS 418 million.
“Globes” first reported about the reduced price for Leumi Gemel last night. Bank Leumi expects to post a capital gain of NIS 250 million on the reduced sale price.
Bank Leumi announced the sale of Leumi Gemel provident funds in two separate deals: one with Harel Insurance Investments Ltd. (TASE: HARL) and the other with Markstone. At the time of the sale to Markstone in November 2005, the provident funds involved managed NIS 13.9 billion in assets, and the agreed-upon price tag was NIS 473 million. The closing price amounts to a discount of NIS 55 million.
At the end of September, the provident funds sold to Markstone managed NIS 13.3 billion in assets. The sale price amounts to 3.1% of assets managed. The parties also signed related agreements, including a distribution agreement at a fee of 0.25% of total assets, and a five-year operating agreement, with an option to extend, at a fee 0.1% of the balance of assets managed. These agreements are subject to approval of Prisma and Leumi Gemel’s directors, as well as the regulators as required by law.
As part of Bank Leumi’s preparations for entering the pension market under the Bachar capital market reforms, the bank has sold Psagot Ofek Investment House Ltd. to York Capital Management LLC for NIS 1.28 billion. The bank has also signed an agreement to sell Leumi Pia Trust Management Company Ltd. to Harel for NIS 579 million, as well as provident funds for NIS 575 million.
Bank Leumi has also agreed to sell Kahal Employees Supplementary Training Fund Ltd., which it jointly owns with Israel Discount Bank (TASE: DSCT), to Migdal Insurance and Financial Holdings Ltd. (TASE: MGDL). Bank Leumi’s share of the deal is worth NIS 150 million.
Published by Globes [online], Israel business news - www.globes.co.il - on October 30, 2006
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