Shari Arison has signed a memorandum of understanding to sell 49 percent of Arison Holdings, the controlling shareholder in Bank Hapoalim, to as-yet unidentified buyers in North America, according to media reports on Sunday.
The deal, which has been estimated at a value of 3.25 billion shekels ($930 million) by Calcalist, would make it one of the biggest in Israeli financial history.
The sale price will be set according to a valuation of NIS 24.82 ($7.11) per share for Bank Hapoalim, slightly higher than the bank’s current market price. Hapoalim shares were trading 1.5 percent higher at NIS 24.60 at 10 a.m. in Tel Aviv on Sunday, and the share has risen some 15 percent in the past 12 months.
“Once the transaction will be completed, we will act together with our new partners, and with the bank’s management and employees, to enhance responsible long-term growth, for the benefit of all stakeholders, customers and the Israeli market,” Arison said in a text message.
Although the Arison group owes a substantial debt to bondholders, sources quoted by Globes said that the purpose of bringing in the North American investors is not to pay off debt, but to expand investments.
Bank Hapoalim notified the Tel Aviv Stock Exchange of the MOU on Sunday morning. Nothing is final, however. The deal is subject to a due diligence examination by the investors, and regulatory approvals, such as from the Bank of Israel, which could take months to obtain.
Control of the bank is expected to remain with Arison, who will still own 51 percent of Arison Holdings.
The news did not come as a surprise to industry professionals.
“We have known for a while that Arison has been trying to liquidate part of her holding in Bank Hapoalim. She didn’t manage to sell a stake in the bank, so she has gone up one tier, and is selling half of her stake in Arison Holdings,” Saar Golan, an equity trader at the Tel Aviv-based Bank of Jerusalem, was quoted by The Times of Israel as saying.
“Whoever buys above five percent in a bank, or anyone getting a controlling stake, will need regulatory approval, and that is not an easy process,” he said.
“Hapoalim shares are at a multi-year high at the moment, so it is a good time to sell and use the proceeds for other purposes. We expect her to sell her remaining stake as well, eventually.”
According to another source, the three North American investors will work together as a consortium with the aim of becoming a strategic partner to the bank. Their long-term goal is to help Hapoalim formulate an international strategy and maximize its technology abilities, he said. He called it a “demonstration of faith” in the Israeli banking system, which has been beleaguered by increased regulation and has been targeted by U.S. tax authorities for aiding bank customers in tax evasion.