Bank Leumi
Photo: Omer Hacohen
American hedge fund wins Leumi bid
Cerberus-Gabriel hedge funds win bid as strategic investor to hold controlling shares of Bank Leumi; buyer to pay NIS 2.474 billion for 9.99 percent of shares sold by State
The American hedge fund group Cerberus-Gabriel Capital is the winner of the bid to purchase controlling shares in Bank Leumi, the State announced Monday night.
Cerberus-Gabriel offered NIS 2.474 billion (about USD 500 million) for 9.99 percent of the bank's shares, and has the option to purchase another 10.01 percent of the shares held by the State within a year and a half, and to reach a total holding of 20 percent of the bank's shares.
If the option is realized, the overall return from the sale the State's shares in Leumi will amount to NIS 4.617 billion (about USD 1 billion).
The six other contenders who lost the bid include strategic investors – Lev Leviev, IDB and Bill Davidson – and financial contenders – UBS, Deutsche Bank and Citibank.
'Sale to strategic investor will strengthen competition'
Finance Minister Ehud Olmert said that the sale constitutes an achievement to the Israeli economy in general, and to the privatization process in particular.
"The sale of such a big bundle of shares of a central Israeli bank, for the highest price ever to a strategic investor, will strengthen the competition between the banks and will contribute to the local capital market," he said.
Yaron Zelekha, the treasury's accountant-general, who led the tender, said that the participation of financial contenders encourages the strategic investors to improve their offers.
"We met our commitment to the public and completed the privatization of the entire banking system in 2005," he concluded with satisfaction.
