First International Bank of Israel (TASE: FTIN1;FTIN5) has acquired 51% of Bank Massad from Bank Hapoalim (LSE: BKHD; TASE: POLI) for NIS 236 million. This is a similar price to the one Bank Hapoalim received on the sale of Bank Otzar Hehayal, also to First International Bank, and Bank Yahav for Government Employees Ltd. to Mizrahi Tefahot Bank (TASE:MZTF).
According to First International Bank, the price tag reflects a premium of 166% on Bank Massad’s shareholders’ equity at the end of June. According to Bank Hapoalim, the price reflects a value of 180% of shareholder equity, which is necessary to ensure a capital adequacy ratio of 10%, as well as shareholder equity surplus of 100%. Bank Hapoalim will record a capital gain of NIS 60 million on the deal in the first quarter of 2008.
The negotiations were conducted by Bank Hapoalim chairman Dan Dankner, CEO Zvi Ziv, and deputy CEO and head of finance and information systems Jacob Rozen. Representing First International Bank were CEO Smadar Barber-Tsadik and corporate division deputy CEO Ilan Batzri. The two sides signed a memorandum of understanding this morning, with a detailed agreement to be signed in the coming days. The agreement will be based on the outline of the agreement for the sale of Bank Otzar Hehayal.
Bank Massad, which specializes in providing banking services to teachers, is expanding. It has grown from 11 branches two years to 16 branches today, and plans to reach 20 branches within a year. It will open a branch in Haifa later this year, and branches in Jerusalem, Hadera, and Ashkelon in 2008.
Published by Globes [online], Israel business news - www.globes.co.il - on September 18, 2007
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