Sources inform ''Globes'' that the Bank of Israel intervened to change Poalim Capital Markets' deal to acquire control of IBI Underwriting and Investments. Poalim Capital Markets was prevented from appointing a majority of IBI's board of directors and receiving golden shares in IBI subsidiaries. The Bank of Israel objected to Poalim Capital Markets acquiring a minority position in IBI, while effectively controlling the company and its subsidiaries. Poalim Capital Markets is a subsidiary of Bank Hapoalim.
IBI today announced amendments to the investment agreement by Poalim Capital Markets in the company. The parties agreed that IBI will initially allocate 20% of its shares to Poalim Capital Markets and its controlling shareholders and employees will sell another 9% of its equity. At that point, two of IBI's directors will be replaced by Poalim Capital Markets representatives, instead of the three in the original deal.
The parties also agreed that in contrast to the original deal, Poalim Capital Markets will not receive golden shares that would have given it control of the boards of directors in IBI-affiliated companies. However, if the legal restrictions to the increase in Poalim Capital Markets' stake in IBI to 50.1% are not lifted by the end of 2002, then IBI's subsidiaries will allocate to Poalim Capital Markets at its demand 29.5% of their equity and 50% of voting and management rights.
Poalim Capital Markets initially acquired 29% of IBI for NIS 29 million, reflecting IBI's equity plus a premium of NIS 47 million (NIS 6.50 a share, 25% above the market price).
IBI's equity is NIS 44 million, which means Poalim Capital Markets' investment increases its equity by 50%. Despite the primary market doldrums, IBI posted a net profit of NIS 2 million in the first half of 2002, compared with NIS 11.1 million in 2001.
Published by Globes [online] - www.globes.co.il - on September 22, 2002