Two weeks after Israel Discount Bank (TASE: DSCT) submitted a bid for the acquisition of Dexia Israel (Public Finance) Ltd. (TASE:DXIL), A target=new href=http://www.bankjerusalem.co.il/>Bank of Jerusalem (TASE: JBNK) has also made a bid - a non-binding bid for a merger between the two banks.
Bank of Jerusalem previously tried to acquire Dexia Israel when it was still controlled by the Dexia global bank, but its bid was not accepted. Dexia Israel has since become a bank with no controlling core, whose shares were distributed on the stock exchange. The interest in the acquisition of Dexia Israel has boosted its share price 10% in the past two weeks, pushing its market cap up to NIS 580 million.
There are a number of options for a deal. The first is the shares. Another possibility is a share swap similar to the deal reached between Mizrahi Tefahot Bank (TASE:MZTF) and Union Bank of Israel (TASE: UNON). There are other considerations that must be taken into account, however, such as which of the parties will pay the tax on the deal. A third option on the agenda is a sale of Dexia Israel's assets, headed by its credit portfolio, while leaving the bank as a stock exchange shell. The sale process is being accompanied by the Value Base investment bank, which will also try to find additional buyers besides Discount Bank and Bank of Jerusalem.
The process is becoming more difficult, because the bank has no controlling shareholder and this is the first time that a bank with no controlling shareholder has been put up for sale. Control of Dexia Israel is spread over the stock exchange; its leading shareholders include Union of Local Authorities in Israel, the Noked hedge fund, investment institutions such as Halman Aldubi and Meitav DS Investment House Ltd., and Teddy Sagi, who is not a party at interest in the bank, but is believed to possess a considerable holding in it.
Published by Globes [online], Israel business news - www.globes-online.com - on August 29, 2018
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