Earlier this week, Hezi Hermoni and other shareholders in Dexia Israel (Public Finance) Ltd. (TASE:DXIL) submitted to its board of directors a written offer for non-tradable shares in the bank, amounting to 4% of the voting rights and 1.5% of its share capital. They offered NIS 77 per share, or a total of NIS 9.75 million.
The number of shares in the offer is the maximum amount that can be bought without exceeding the 4.99% holding cap that requires approval of the Bank of Israel.
Hermoni, formerly CEO of Tadiran Communications, asked Dexia Israel's board to bring the offer to the attention of the shareholders. The bank's executives rejected the request, and told Hermoni, "They do not deal with matters of this kind, and he should approach the shareholders directly."
Dexia Israel has not published an official report about the offer.
Franco-Belgian Dexia Bank SA (Euronext: DEXB) owns 65% of Dexia Israel. Dexia Israel specializes in granting credit to municipalities. Its CEO is David Kapah. Dexia Israel's share structure includes five kinds of shares with different voting and capital rights: tradable capital shares, non-tradable capital shares, and three kinds of shares that grant the right to appoint a director. This structure discriminates against shareholders who are not the controlling shareholders. Despite statements on this matter, the bank has not acted to equalize the rights.
Hermoni told "Globes", "The offer I submitted to buy shares is a tactical move intended to force an equalization of rights in the bank's shares. This measure is in the interests of the controlling shareholder as well as other shareholders, such as the Union of Local Authorities in Israel, which holds an asset worth tens of millions of shekels that is like a millstone, which cannot be converted."
After buying the shares in the offer, and equalizing the rights, Hermoni intends for an Indian bank to acquire control of Dexia Israel in order to enter the Israeli market. "The strategic move is to bring an Indian bank to Israel. Indian bankers are interested in entering Israel, and the acquisition of Dexia is as good an option as any. This deal is good, and it interests the Indians," said Hermoni. He confirmed that that no Indian bank has submitted an offer to Dexia Bank to buy Dexia Israel.
Hermoni declined to name the Indian bank.
Dexia Israel has been on the shelf for a long time. In June, "Globes" reported that Dexia Bank was in contact with Israeli banks for the sale of Dexia Israel, because it wanted to leave the Israeli market.
Dexia Bank's share price rose 3.1% today to NIS 669.70, giving a market cap of NIS 489 million.
Published by Globes [online], Israel business news - www.globes-online.com - on January 12, 2011
© Copyright of Globes Publisher Itonut (1983) Ltd. 2011