Bank Hapoalim today announced the acquisition of 36% of voting shares and 16% of capital shares in Bank Otzar Hehayal, for NIS 102.8 million. The shares were purchased from other shareholders, Hever (Israel Defense Forces and security forces servicemen and pensioner association) and the Defense Establishment employees' investment fund.
Following the deal, Bank Hapoalim holds a 66% controlling stake of voting shares and 66% of capital shares in Bank Otzar Hehayal. The deal was aimed at making the sale of the bank easier, since Bank Hapoalim has been obliged by a government decision to sell its holdings in it.
Bank Hapoalim now plans to start an equalization of rights process which will pave the way to issue the Bank Otzar Hehayal shares, or sell the controlling stake to private investors. The bank said no decision had yet been made on the matter.
In coordination with the government, it was agreed that Bank Hapoalim would sell its holdings in Bank Otzar Hehayal within three years of acquisition of the shares and equalization of rights. The agreement with the government was reached in May 1998.
The decision to oblige Bank Hapoalim to sell its holdings in Bank Otzar Hehayal was made by the Brodet Committee, which aimed at reducing over-concentration of the banking sector.
Published by Israel's Business Arena on September 22, 1999