The Ministry of Finance yesterday sold 5% of Israel Discount Bank (TASE: DSCT) to Deutsche Bank AG (NYSE: DB; XETRA: DTEG) at NIS 8.871 per share, 2.52% less than the share's opening price of NIS 8.90, for a total of NIS 435 million. Discount Bank's share fell 4.7% yesterday to NIS 8.67, so Deutsche Bank did not exercise its option to buy an additional 3.33% of Discount Bank at NIS 8.83 per share.
The fall in Discount Bank's share meant that Deutsche Bank had to sell the shares at an average price of NIS 8.85 per share, absorbing an estimated NIS 10 million loss on the deal.
Minister of Finance Yuval Steinitz said, "The sale was an achievement for the State of Israel, and a vote of confidence in its economy and financial soundness." He added that he would keep his promise to sell the government's remaining holdings in Discount Bank and Bank Leumi (TASE: LUMI) by the end of 2010. Following yesterday's sale, the government owns 20% of Discount Bank and 11.46% of Bank Leumi, through MI Holdings (State of Israel Properties).
Discount Bank's share rose 0.3% by mid-afternoon today to NIS 8.70. Bank Leumi's share rose 0.7% to NIS 16.89.
Published by Globes [online], Israel business news - www.globes-online.com - on January 13, 2010
© Copyright of Globes Publisher Itonut (1983) Ltd. 2010