Union Bank of Israel (TASE: UNON) and Israel Credit Cards-Cal Ltd. (ICC-Cal) (Visa) today signed an agreement to continue their collaboration for ten more years for the issue of Visa and Diners Club credit cards to Union Bank customers.
ICC-Cal also gave the bank an option to acquire up to 3% of the company when it holds its IPO. The option is priced at a 25% discount on the offering price. The option is convertible to a cash equivalent at ICC-Cal's sole discretion. If ICC-Cal is floated at a company value of NIS 3 billion, the option is worth NIS 22 million. However, an IPO by ICC-Cal is not on the agenda for the coming year.
Union Bank has tens of thousands of credit cards, mostly issued by ICC-Cal, and a few issued by Isracard Ltd.
Union Bank CEO Haim Freilichman said, "This agreement is another step toward strengthening the bank's retail infrastructure."
ICC-Cal CEO Israel David said, "I consider Union Bank as a strategic partner." David took up his post three months ago, after the company was exposed to a series of failures and flaws in clearing credit cards.
Published by Globes [online], Israel business news - www.globes-online.com - on July 4, 2010
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