If such a deal is not achieved, the company will make an international offer for sale of its shares. The Ministry of Finance opposes a similar move for Discount Bank.
State of Israel Properties general manager Meir Jacobson has been conducting negotiations with overseas investment banks in recent weeks, over the sale of a parcel of Bank Leumi shares, along the lines of the deal executed this week whereby Bezeq shares were sold to Merrill Lynch. Jacobson made a trip to London for this purpose, and reportedly met representatives of Lehman Brothers, Merrill Lynch, UBS, and others.
The price of a parcel of 6-7% of Bank Leumi’s shares is estimated at some $150 million. State of Israel Properties intends to offer initially a share parcel of this order of size.
If this move does not go ahead, State of Israel Properties intends to make an international offer for sale of Bank Leumi shares at the end of 1997 or the beginning of 1998. The government currently holds 63.5% of the bank’s shares, with full dilution after the exercise of options.
Jacobson seeks do something similar at Discount Bank, but the Ministry of Finance and some of the directors of State of Israel Properties are opposed. This is because, fully diluted, the government now holds 51.5% of Discount Bank’s shares. A further share sale not effected as a sale of the controlling interest will mean that the State will hold less than 50%. IDB holds 13% of the shares in the bank, and the Ministry of Finance fears that an opening might be created for IDB to become the owner of the controlling interest.