The Ministry of Finance plans to complete the sale of its holding in Israel Discount Bank (TASE: DSCT) within weeks. The ministry plans to sell its remaining 11.7% holding, worth more than NIS 800 million, in a single transaction. Accountant General Shuki Oren is handling the sale. When the sale is complete, the government's last holding in a bank will be in Bank Leumi (TASE: LUMI).
The Ministry of Finance is encouraged by the success of its previous sale of 8.33% of Discount Bank to UBS AG (NYSE; SWX: UBS) in July at an average price of NIS 6.79 per share for a total of NIS 553 million. That sale was the first in which the buyer exercised an option to buy an additional 3.33% of Discount Bank. The Ministry of Finance has therefore decided to not to sell its remaining holding in two separate sales, but to try to sell it all in one shot.
Discount Bank's share price rose 0.6% by midday today to NIS 7.13, giving a market cap of NIS 6.95 billion, about 5% higher than the share price in the previous sale by the government.
Another factor easing the Ministry of Finance's intention to sell its remaining Discount Bank stake is the recent easing by the Bank of Israel to allow investment institutions to own 10% of a bank without a permit, double the previous limit of 5%.
Published by Globes [online], Israel business news - www.globes-online.com - on October 13, 2010
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