The Finance Ministry has extended the deadline for those bidding for the state's controlling stake in Bank Leumi to November 14 from November 7.
The Treasury said on Wednesday that it lengthened the process to provide the potential bidders with extra time to assess changes made to the conditions of the sale. A spokesman for MI Holdings, the government company that handles the state's banking assets, said the extension was also granted following a request from those interested in participating in the tender, as they have not had sufficient time to consult with Israeli legal and financial experts due to the holidays.
Acting Finance Minister Ehud Olmert approved the amendments after meeting with senior officials and indicated that the changes were designed to make the tender more attractive.
"The amendments are expected to increase the number of bidders and maximize the amount that the government will get for the sale," he said on Wednesday.
The government, which holds 24.78 percent of Leumi, plans to sell 9.99% of the bank's shares and an option to buy another 10.01%, while it also intends to divide up about 4% among the employees, leaving the state with less than 1%. The 20% being sold is viewed as a controlling stake and is worth around $933m., based on Leumi's market capitalization of $4.67b.
Leumi shares closed down 2.4% at NIS 14.91 on the Tel Aviv Stock Exchange.
Among the changes to the conditions of the privatization, the Bank of Israel has agreed to Olmert's request to allow Leumi to pay dividends from the sale of assets that it is obligated by law to divest. Under the recent Bachar reforms, Leumi must sell its interests in mutual and provident funds, a process it has already started.
Olmert also wants to change the bank's bylaws so that shareholders can replace the board of directors by a simple majority vote rather than needing 75%, as is the case now. To make this change, Olmert plans to call a shareholders meeting.
In addition, the Treasury has extended the period for exercising the option to buy the extra 10.01% from nine months to one year, while it also said that the price of the option will be based on Leumi's average share price for the sixty days before the request is made to take up the option rather than for the seven days beforehand, as per the original plan.
"This is in order to reduce the influence of share-price fluctuations," the ministry said.
Those who have expressed an interest in buying the government's holding in Leumi include Nochi Dankner's IDB Holdings and a group of British investors. Shlomo Eliahu, Leumi's biggest private shareholder with a 10% stake, has said he would be interested in forming a consortium to participate in any government tender.