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Monday, 20 July 2015

Billionaire Arison Mulls Stake Sale in Israel Bank Hapoalim

Billionaire Shari Arison, controlling shareholder of Israel’s Bank Hapoalim Ltd., is in talks for the potential sale of a stake in the nation’s biggest lender.

The group “receives, initiates and considers from time to time offers and possibilities for the entry of new investors into Bank Hapoalim,” Arison Investments Ltd. said in an emailed statement. The company said it placed “particular emphasis on the development and expansion of the bank’s international operations.” The company holds a 20 percent stake in Bank Hapoalim via Arison Holdings Ltd.

Arison has whittled down her stakes in Bank Hapoalim over the years as higher regulatory requirements led the bank to cut back on dividend payments, halting them entirely from July 2011 to August 2013. The dividend yield in the next 12 months for the bank is expected to be 2.2 percent compared with 3.5 percent for peers in the Middle East, according to data compiled by Bloomberg. Finance Minister Moshe Kahlon has also pledged to increase competition in the banking sector.

“She wants out,” Meir Slater, head of research at Bank of Jerusalem Ltd., said by phone. “The bank has been paying low dividends and there could be better investments around.”

In December 2013, Israel passed a law that prohibits Israeli companies from owning financial-services corporations as well as industrial businesses. Arison, the nation’s wealthiest woman, also owns a 47 percent stake in Shikun & Binui Ltd. through her holding company. Even if the law does not apply directly to Arison, holdings in the bank could limit her from making other investments, Slater said.

Efrat Peled, chairman and CEO of Arison Investments, which manages $2.5 billion in assets, said in an interview in March that the company remained committed to Bank Hapoalim and viewed Israeli financial services as “an interesting sector to continue to grow in.”

Bank Hapoalim has international subsidiaries and overseas branches including in Turkey, Kazakhstan and New York, according to the company’s first quarter financial report. Hapoalim shares advanced 1.6 percent to 21.44 shekels at the close in Tel Aviv.

The company statement followed a report by Israel’s Globes website on July 19 that said Arison Investments was considering the sale of part of its stake in Bank Hapoalim.


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