The bank must sell its remaining stake in the insurance company.
The Bank of Israel has granted Bank Leumi (TASE: LUMI) a three month extension to sell its 9.89% stake in Migdal Insurance and Financial Holdings Ltd. (TASE: MGDL) to the end of June 2008. The sale is mandated under the amended Banking Law. The holding is worth an estimated NIS 698 million.
Leumi sold half of its 20% stake in Migdal in March 2006 to the company's controlling shareholder, Italian insurer Assicurazioni Generali SpA (Milan: GASI). That sale was mandated by the Bachar capital market reform legislation. The Banking Law now permits a bank to own a stake in only one conglomerate, forcing Bank Leumi to sell the rest of its stake in Migdal.
Bank Leumi claims that its stake in Migdal is a financial holding, not a stake in a conglomerate.
Published by Globes [online], Israel business news - www.globes-online.com - on January 7, 2008
© Copyright of Globes Publisher Itonut (1983) Ltd. 2008