Bank Hapoalim (TASE: POLI), managed by CEO Arik Pinto, is likely to soon sell its 9.47% holding in Clal Insurance Enterprises Holdings Ltd. (TASE: CLIS), currently worth NIS 353 million. Bank Hapoalim, which faces a large fine from the US tax authorities resulting from an investigation into alleged tax evasion by its customers, for which it has made a $365 million provision, is believed to be considering the sale, in view of the recent rise in Clal Insurance's share price. Bank Hapoalim did not respond to the report.
Bank Hapoalim previously held a higher stake in Clal Insurance, but this changed following the Bachar reform, which limited the bank to a 10% holding in an insurance company. Since every holding of 5% or more in an investment institution requires the same authorization required as for holding a controlling interest, and due to the difficulty in recent years in finding buyers that can meet these regulatory requirements, it appears that Bank Hapoalim will have to find at least two buyers in order to sell all of its shares in Clal Insurance. It can therefore not be ruled out that if and when the bank sells it shares in Clal Insurance, it will do so by spreading the shares, without waiting for a strategic buyer interested in acquiring a holding that is not a controlling interest (without buying additional shares), but nevertheless requires meeting the regulatory requirements.
Clal Insurance, managed by CEO Yoram Naveh, is currently in a unique position. It has no controlling shareholder; the entire controlling interest in the company was sold gradually by Moshe Tery, appointed by the Supervisor of Insurance as trustee for the shares. In practice, Tery exercised the authority of a controlling shareholder in the name of the IDB concern, controlled by Eduardo Elsztain. Clal Insurance's share price has risen 9% this year, although it fell 3% today following reports about the possibility that more shares will now be offered for sale (in addition to IDB's shares, which were sold in 5% packets, thereby dragging down the share price). Clal Insurance's current market cap is NIS 3.7 billion.
In any case, selling Bank Hapoalim's shares in Clal Insurance, if and when it happens, will come on top of sales from the bank's real estate portfolio. A month ago, "Globes" reported that Bank Hapoalim was putting up for sale the building housing its branch on Hayarkon Street in Tel Aviv, the value of which is believed to be in the NIS 70-90 million range. The bank has already sold 16 other properties in the past two years for a total in the tens of millions of shekels.
Published by Globes, Israel business news - en.globes.co.il - on October 15, 2018
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