Apax signs deal to buy control of Psagot

Private equity firm Apax Partners has signed a deal to buy a majority stake in Psagot, Israel's largest investment house, from shareholders led by York Capital Management, Apax said in a statement on Sunday.

Apax said the deal was subject to regulatory approval. Psagot told the Tel Aviv Stock Exchange in a statement that the deal was signed on Friday.

A financial source in Tel Aviv told Reuters on Thursday Apax would buy a 76% stake in Psagot from York in a deal that valued the brokerage at NIS 3.1 billion (about $820 million).

"This is a company that we have been tracking for some time, and we are delighted to have the opportunity to support a very strong management team in its next phase of growth," Zehavit Cohen, head of Apax Israel, said in a statement.

It remains unclear whether Markstone Capital, which owns the remaining 24%, will choose to sell its stake. A spokesman for Markstone declined comment.

York bought 100% of Psagot, which manages assets of NIS 122 billion ($32 billion), three years ago from Bank Leumi for nearly $300 million.

York now holds 57% of Psagot and is expected to post a capital gain of about NIS 1 billion ($27 million) from the sale, the source told Reuters on Thursday.

Apax's assets in Israel include a stake in Tnuva, Israel's largest foodmaker.

Apax and two other partners agreed in October to sell their 30.6% stake in Bezeq Israel Telecom, Israel's largest telecom group, to 012 Smile Communications for NIS 6.5 billion ($1.72 billion).

Markstone is a US-Israeli investment fund whose former chairman Elliot Broidy pled guilty last week to a felony charge for bribing four senior officials who managed New York State's pension fund.