Bank Leumi (TASE: LUMI) is parting from one of its historic holdings. Today, the bank began selling its remaining stake in insurance company Migdal Insurance and Financial Holdings Ltd. (TASE: MGDL), which amounts to 9.8%. The bank, headed by Rakefet Russak-Aminoach, at first planned to sell only 5%, but because of the demand from the institutions, it ultimately sold 6.6%.
The sale took place at NIS 5.72 per share, 2% below today's opening price on the stock market. The sale will yield the bank a gain of NIS 158 million. A 2% block was sold to an unnamed investor, and the rest of the shares were distributed among the institutions. Leumi, which is now left with 3.2% of Migdal, undertook not to sell more of the shares in the next three months. The chances are that after this period it will realize the balance of its holding.
In 2006, Leumi sold 10% of Migdal to Generali for NIS 670 million, a price 12% higher than the price at which the shares were sold today.
Shlomo Eliahu recently acquired control of Migdal. Eliahu, who owns 8.5% of Leumi, received finance of NIS 2 billion from the bank in order to buy the insurance company.
The sale of its Migdal stake will apparently not be the last realization by Bank Leumi of its holdings. Leumi Partners, the bank's non-financial investment arm, is in the process of selling 5% of pharmacy chain Super-Pharm to Israel Discount Bank (TASE: DSCT). Leumi, which for years has held the largest investment portfolio in the banking system, is believed to have changed direction, and to be about to reduce its non-financial holdings substantially in the coming years.
Published by Globes [online], Israel business news - www.globes-online.com - on January 3, 2013
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