yuval steinitz 311.
(photo credit: Ariel Jerozolimski)
Finance Minister Yuval Steinitz on Monday asked the Knesset Finance Committee to allow the government
to sell its 11.46 percent stake in Bank Leumi.
“In the privatization
process, the sale of the government’s shares will be sold without creating a
controlling core in the bank,” the Finance Ministry said in a statement. “The
Bank Leumi stake will be sold by the accountant general through block trades
using financial institutions, which will offer the shares to investors in Israel
The government’s 11.46% stake in Leumi is worth about NIS
2.5 billion, out of which 10.5% will be allocated for sale to the public
remainder to the bank’s employees, the statement said.
plans to sell its shares in blocks to institutions until the end of the
the statement said.
The size of the share packages to be offered each
time will be set by Accountant General Shuky Oren according to market
conditions, it said.
“The decision to sell the shares in this way was
taken after it became apparent that chances of selling a controlling
the bank to a strategic investor is very low,” the statement
Following the announcement, Bank Leumi shares rose 0.9% on the Tel
Aviv Stock Exchange.
Leumi is the last of the country’s lenders to remain
under government control, after the government took over the major banks
decades ago. The government has been seeking potential buyers, mostly
foreign lenders, since 2007.
After several attempts to find a buyer or
investor for a controlling core failed, the government decided to
privatization of Bank Leumi through block trades.
Since the beginning of
the year, businessman Shlomo Eliyahu, Bank Leumi’s largest private
with a 9.59% stake, has expressed interest in forming a group to gain
the bank, but without success.
To sell its Leumi shares without creating
a controlling core, the government needs to amend the so-called Marani
the Banking Ordinance, so that shareholders can appoint board members at
without a controlling shareholders permit.
The Finance Ministry and the
Bank of Israel said they would advance the amendment in the coming days.
Finance Ministry expects it to be passed by the end of the year.
beginning of the year, the government announced that it would try to
remaining shares in the country’s banks over the course of 2010 through
In January, Deutsche Bank won the bidding for 5% of the
government’s 25% stake in Israel Discount Bank, in a deal worth NIS 435
At the beginning of the year, the Finance Ministry said it
expected the sale of the government’s stakes in Israel Discount Bank and
Leumi to raise NIS 4b.Bloomberg contributed to this report.