Hard-hit US private equity firms Cerberus Capital Management LP and Gabriel Capital Management have issued a tender to sell their stakes in Bank Leumi (TASE: LUMI).
Each firm owns 4.83% of the bank, so that together, a 9.66% stake, with a market value of NIS 1.4 billion, is being offered.
Sources close to the private equity firms denied that they were forced to put their stake up for sale following steep investment losses. Rather, they claimed that since Cerberus and Gabriel realized that the Bank of Israel does not intend to grant the funds a control permit for Bank Leumi, the holding became only a financial investment, one in which they are not interested.
Nonetheless, market sources believe that the sale stems from a need for cash at both firms.
The sale is expected to be completed by April 30. The minimum price was set at NIS 10 per share, around the current market price.
Cerberus and Gabriel Capital Management bid together to buy a stake in Bank Leumi as the government sought to privatize the bank. However, the deal fell through and the partners are selling assets.
Shares in Bank Leumi, which rose in morning trade, were down 1.4% by late afternoon on the Tel Aviv Stock Exchange (TASE).
Published by Globes [online], Israel business news - www.globes-online.com - on April 19, 2009
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