Just over five weeks after increasing its stake in mutual fund company Ilanot Discount to 100 per cent from 55%, Israel Discount Bank is already looking to sell the unit.
The bank said on Monday in a statement to the Tel Aviv Stock Exchange that it has approached a number of companies regarding a possible sale of all or part of its stake in Ilanot Discount and in Discount Management Provident Funds.
At the end of September, Discount Bank bought 45% of Ilanot Discount for NIS 229.7 million from Nochi Dankner companies IDB Development and Discount Investment, exercising a right of first refusal and blocking a bid from Solomon Capital Markets.
The transaction was surprising because in July the Knesset passed the Bachar reforms into law, thereby obligating the banks to sell their interests in mutual and provident funds. Bank Leumi was the first to start implementing the reforms by agreeing to sell Leumi Pia to Harel Insurance Investments and its 18.2% stake in Direct Insurance Financial Investments to Zur Shamir Holdings. In October, Bank Hapoalim agreed to sell mutual funds management arm Poalim Mutual Funds to Solomon Capital for NIS 955m.
Although Discount Bank has now started the process of selling its interests in mutual and provident funds the sale of the assets isn't certain to go ahead, with the bank including a number of provisos in its statement.
"The bank is not obligated to accept the highest bid or any bid at all, and it reserves the right to change the sale conditions, the sale process, and the timetable; or to stop the whole process," Discount Bank said.
The bank's shares closed up 3.4% at NIS 7.06 on the TASE.