The US Hasten Brothers group, which has decided not to bid in the tender for acquiring the control of Discount Bank, will compete for control in Bank Leumi.
With a view to bidding for control in Bank Leumi, the Hasten brothers have begun to form a group with a number of other US investors. The Hasten Brothers, represented in Israel by Adv. Shlomo Nass, also bid, unsuccessfully however, for General Bank.
Government sources knowledgeable about the Discount Bank tender estimate that in the end, only two groups may actually post bids. The final date for bidders to announce their intention of contending is Wednesday.
A group consisting of Shlomo Eliyahu, the Lubinsky and Landa families (the Union Bank controlling shareholders group) and Yitzhak Tshuva, will certainly compete. At this stage, it is still not certain whether Bernard Schreier will join this group. He will decide tomorrow.
A second group due to bid will evidently be headed by Jeff Keil, while the identity of other possible group members is not clear. Possible names are Eliezer Fishman and Zadik Bino.
It is still not clear whether the Steinmetz family, represented by Lehman Brothers, will bid in this tender, even though it recently purchased 3% of Discount Bank’s shares on the stock exchange. If it does bid, the group is expected to do so in conjunction with the US TPG fund.
It is meanwhile reported that Bank of Israel is not expected to oppose a merger between Union Bank and Discount Bank, if the Eliyahu group wins the tender. This is despite the fact that Bank of Israel intends to force Discount Bank to sell Mercantile Discount bank. Schreier and the Hasten brothers have an agreement for the joint acquisition of Mercantile bank in this event.
Concerns that withdrew from the bidding over the bank told "Globes", "We estimate that it will take a long time until a nominal return is obtained on the investment in the bank, whose market value is currently estimated at NIS 1.2 billion, similar to its equity. There are many problems such as labour relations and the ban on the distribution of a dividend out of the consideration obtained from the sale of Mercantile, or from the sale of the shares held by Discount Bank in FIBI. Another matter that should be taken into consideration is the bank’s credit position, in view of the problematic matter of the extensive credit allowed the real estate sector".
Published by Israel's Business Arena August 10, 1998