Sources inform ''Globes'' that York Capital Management LLC wants to increase its holding in Bank Hapoalim (TASE: POLI; LSE:80OA) to 9.9% from its current stake of 4%. York Capital has filed an application with the Bank of Israel Banking Supervision Department for a pre-ruling to buy shares. The parties are due to meet later this week.
York Capital owns Psagot Investment House Ltd., Israel's largest investment house, which it acquired from Bank Leumi (TASE: LUMI). York Capital acquired its stake in Hapoalim in a stock allocation in March.
By law, 9.9% is the maximum holding permissible in a bank by an entity that also owns financial and pension assets.
York Capital VP Jeremy Blank is the company representative in Israel and Psagot chairman is Arik Steinberg. At a Psagot conference yesterday, Steinberg said, "York Capital wants to expand its activity in Israel and is examining further investments in financial companies."
The sources said that York Capital's request to the Bank of Israel was with the knowledge and consent of Bank Hapoalim controlling shareholder Shari Arison and bank chairman Dan Dankner.
A top banker told "Globes", "York Capitals' wish to buy Bank Hapoalim shares especially now is a vote of confidence in the bank and in Israel's financial system."
Although York Capital could buy the Bank Hapoalim shares on the open market, it might prefer buying some of the free shares held by Shari Arison. The Bank of Israel has said more than once that it would like Arison to bring a partner into Bank Hapoalim, so that she would not be the bank's sole controlling shareholder. This wish was sharpened after she bought out the 23% stake in Arison Holdings Ltd., which controls the bank, held by her elder brother, Michael Arison.
Bank Hapoalim and York Capital have excellent relations. The allocation of 4% of the bank to York was made within 48 hours after a meeting between Blank and Dankner. At the time, York Capital made no request to appoint a director on its behalf to the bank's board, and it not expected to do so even after increasing its stake.
York Capital has $17 billion in assets under management. It acquired Psagot in November 2005 for NIS 1.28 billion.
Published by Globes [online], Israel business news - www.globes-online.com - on December 3, 2008
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