First International Bank will buy 51% of the bank from Hapoalim.
On the eve of the Sukkot holiday Bank Hapoalim (LSE: BKHD; TASE: POLI) and First International Bank of Israel (TASE: FTIN1;FTIN5) signed an agreement for the sale of Hapoalim’s 51% stake in Bank Massad to First International for NIS 236 million. The price tag reflects a premium of 166% on Bank Massad’s shareholders’ equity at the end of June.
The Bank of Israel and other regulators still have to approve the sale. The permits are expected within a few months. The bank agreed that if ownership of Bank Massad is not transferred by May 2008, the price will be adjusted with First International Bank adding half of Bank Hapoalim’s share of Bank Massad’s profits. The Bank of Israel took seven months to approve First International Bank acquisition of Bank Otsar Hahayal from Bank Hapoalim.
The price tag reflects a value of 180% on Bank Massad’s shareholders 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.
Published by Globes [online], Israel business news - www.globes.co.il - on September 30, 2007
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