Hapoalim in talks to buy Discount Bank New York

Bank Hapoalim has received a preliminary permit from the US Supervision Authority for State Banks to acquire Discount Bank of New York.

Bank Hapoalim (TASE: POLI) CEO Zion Kenan is in poll position ahead of his great rival Bank Leumi (TASE: LUMI) CEO Rakefet Russak-Aminoach in the race to buy Israel Discount Bank of New York from Israel Discount Bank (TASE: DSCT). Sources inform "Globes" that Hapoalim has received a preliminary permit from the US Supervision Authority for State Banks to acquire Discount Bank of New York. This at a time when Bank Leumi has administrative difficulties with the US Supervision Authority for State Banks because of the investigation by the US Department of Justice and US Tax Authority regarding US bank accounts held in Bank Leumi Switzerland.

Even though Bank Hapoalim has been granted the preliminary permit, the sides are still far from an agreement, among other things regarding the price. Discount Bank is believed to be asking $900 million, which is 8% more than the bank's equity.

At a time of capital shortfalls and capital adequacy requirements, it is by no means certain that Bank Hapoalim would receive approval from Israel's Supervisor of Banks for a NIS 3 billion acquisition, or indeed whether Hapoalim itself wants to enter such a large deal even if it would dramatically expand its US activities. Banking sources in Israel believe that ultimately a foreign bank will buy Discount Bank of New York.

Bank Leumi's spokesman said in response, "We have not been interested in Discount Bank of New York. We are not interested and have not approached and are not approaching anyone on this matter."

Bank Hapoalim's spokesman said, "No comment."

Discount Bank's spokesman said, "We are not holding talks to sell Discount Bank of New York or any other of the bank's assets. There is interest."

Published by Globes [online], Israel business news - www.globes-online.com - on December 4, 2012

© Copyright of Globes Publisher Itonut (1983) Ltd. 2012

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