The Israel Discount Bank will try to call off a December 1999 deal to buy a 20,000-sq.m. office building at 12 Abba Hillel Silver St. in Ramat Gan from contractor and developer Uri Dori for $50 million. The bank has already paid Dori part of the price, and the building is under construction.
Discount Bank will offer the building to Dori, probably at a much lower price than $50 million, in order to make the purchase worthwhile for him. If Dori turns down the offer, the bank will attempt to find buyers for the building on the open market, probably by selling or renting single storeys.
Discount Bank management decided to remain in its current building on Yehuda Halevi St. in Tel Aviv, while utilizing construction possibilities in an adjacent building. The decision is subject to approval by the bank's board.
Discount Bank management believes that in the bank's current state, in which it is losing money and faces cutbacks, it should not spend $50 million on new offices. If hundreds of employees are laid off, the need for a new office building will in any case be reduced. Management also believes it will be easier to sell the bank's controlling interest with $50 million in cash.
At the same time, United Mizrahi Bank management is also likely to reconsider its decision to move from Tel Aviv to the Moshe Aviv Tower (formerly City Gate Tower) in Ramat Gan.
Published by Israel's Business Arena on February 10, 2002