Leumi to pay NIS 74m less for Banque Safdie

The Swiss bank's assets have fallen 30% in value, mainly due to the appreciation of the Swiss franc against the dollar.

Sources inform ''Globes'' that Bank Leumi (TASE: LUMI) will pay CHF 18 million (NIS 74 million) less for Switzerland's Banque Safdie. The price tag for the bank is being adjusted because of a drop in value of Banque Safdie's assets to CHF 3.5 billion from CHF 5 billion when the letter of intent was signed in February.

Most of the decline in Banque Safdie's assets was due to the appreciation of the Swiss franc against the dollar, and customers' withdrawal of assets from the bank.

Bank Leumi said in response, "The acquisition agreement includes a clear, consensual, and organized price adjustment mechanism that applies for two years. The parties will act in accordance with this mechanism and the meeting of milestones set out in the agreement."

The original price tag for Bank Safdie was set at CHF 177 million, including CHF 126 million for its shareholders' equity and the rest derived from management fees for assets managed for customers. The agreement stipulates two price adjustment mechanisms: one for the period between the letter of intent and the closing, and the other for the two years subsequent to the closing. The final price tag for Banque Safdie will therefore only be determined in 2013.

Banque Safdie specializes in private banking services for Jewish customers in Europe and Latin America. The family-owned bank was founded by Edmundo Safdie in 1965. The Safdie family businesses are mostly in Brazil.

When the deal is closed, Bank Leumi will merge the Geneva-based Banque Safdie with Bank Leumi Switzerland Ltd.

Published by Globes [online], Israel business news - www.globes-online.com - on October 3, 2011

© Copyright of Globes Publisher Itonut (1983) Ltd. 2011

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