bank hapoalim 88 298.
(photo credit: Ariel Jerozolimski)
The intention of Nochi Dankner, chairman and controlling shareholder of IDB Holdings Corp. Ltd., to acquire a substantial interest in Bank Hapoalim's controlling core might be squashed by opposition from the Israel Antitrust Authority.
"It has come to our attention that Ronit Kan, the director-general of the Antitrust Authority does not like the deal," said Alon Glazer, a banking analyst at Leader & Co. "The concern is that Dankner, who through IDB - Israel's biggest holding company - already controls a large part of Israeli companies, would also be gaining partial control of the country's largest lender."
Glazer added though that it looked like the Bank of Israel would be in favor of the deal.
Dankner is in the process of negotiating two separate deals, which would make him Shari Arison's partner in controlling Bank Hapoalim.
A source familiar with antitrust matters said, however, that there could be a conflict of interest.
"If IDB, which controls a large number of companies, would be part of the controlling core of the biggest creditor in the market, this might raise concerns over IDB's influence on blocking credit to competitors and conditions of free competition," said the source.
The Antitrust Authority said it had not yet received a formal notification of the transactions.
This week, Dankner's IDB Development Corp. said it was in talks to buy control of Israel Salt Industries Ltd., owner of 6 percent of Bank Hapoalim, of which 3% are part of the controlling core.
"Dankner may end up having to pay a premium for Salt Industries to persuade the Arison family to give up their controlling interest in Bank Hapoalim," said Glazer.
At the same time, Dankner is also in talks to buy up the 5.5% stake owned by foreign shareholders.
"The US shareholders are interested in selling their interest, which Dankner should be able to acquire at a lower price around the market value," said Glazer.
If the two transactions come through and Dankner obtains regulatory approval, the 20% controlling interest would consist of Arison with 11.5% of Bank Hapoalim, and Nochi Dankner with 8.5%. Arison would own 57.5% of the controlling interest, while IDB Development would own 42.5%. Independent of whether the two transactions go through, Arison will continue to be the leading controlling shareholder of the bank.
This week, Arison, chairwoman of the Arison Group, said she was examining the various aspects of Dankner joining the controlling group. Arison has the right of first refusal regarding the other shareholders of the bank.
"Arison knows Dankner very well and has worked well with him before, so she is not likely to make use of her right of first refusal," said Glazer.