15 years after buying shares in Bank Leumi (TASE: LUMI) and becoming a party at interest in the bank, Shlomo Eliahu yesterday completed the sale of his remaining shares. Eliahu, who was required to sell his shares in Bank Leumi and Union Bank of Israel (TASE: UNON) when he acquired control of Migdal Insurance and Financial Holdings Ltd. (TASE: MGDL), yesterday sold 2.8% of Bank Leumi's shares to investment institutions for NIS 591 million. The price was NIS 14.44 a share, a 2.5% discount on last night's closing share price on the Tel Aviv Stock Exchange (TASE). Poalim IBI Underwriting and Investments Ltd. (TASE:PIU) distributed the shares.
70% of the purchasers: Local institutions
Institutional concerns bought the shares. An informed source said that 70% of the institutions were local, and the rest foreign. Eliahu sold a similar number of Bank Leumi shares in October 2013 at NIS 12.85 a share, meaning that waiting until now to sell the rest increased his proceeds by 12.4%.
Bank Leumi trades at a NIS 28.1 billion market cap, after climbing 4.4% since the beginning of the year. Other parties at interest in the bank hold large share parcels they are likely to sell in the future, headed by the state's 6% stake.
Eliahu also owns 27.1% of Union Bank's shares, currently held in trust, which are worth NIS 306 million. According to informed sources, Eliahu plans to sell this holding by the end of the current year.
Eliahu acquired control of the Migdal group in late 2012, after many years of unsuccessful attempts to acquire control of Bank Leumi, following which he abandoned the idea. In order to obtain regulatory approval for his acquisition of control in the Migdal group, he was required to put his holdings in Bank Leumi (10% of the bank's shares at the time) and Union Bank in trust. He was given up to four years to sell his shares in the two banks.
Incidentally, in order to acquire Migdal, Eliahu also had to sell the life and health insurance portfolios of Eliahu Insurance to a competitor: Harel Insurance Investments and Financial Services Ltd. (TASE: HARL). Eliahu currently holds 69.2% of Migdal's shares with a current market value of NIS 3.9 billion.
Published by Globes [online], Israel business news - www.globes-online.com - on October 2, 2014
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