July 11, 2018 / 10:55 AM / 8 months ago

Israel aims to divest remaining stake in Bank Leumi within a year

FILE PHOTO: Pedestrians are reflected in the windows of a branch of Bank Leumi, Israel's second-largest lender, in Tel Aviv, Israel May 30, 2013. REUTERS/Nir Elias/File Photo

JERUSALEM (Reuters) - Israel’s government said on Wednesday it plans to sell its remaining 5.8 percent of Bank Leumi (LUMI.TA), the country’s second largest lender, within 12 months of approval from lawmakers.

The state seeks to sell its 88.3 million shares - worth 2 billion shekels ($549 million) - in a block trade to financial entities that will distribute the shares to investors in Israel and abroad, according to a letter from Finance Minister Moshe Kahlon to Moshe Gafni, the head of parliament’s finance committee.

In the letter, seen by Reuters, Kahlon requested the committee’s approval to ask for bids after the close of a trading day until trading reopens the next morning.

Kahlon’s spokesman said the minister has been working with Accountant General Rony Hizkiyahu for months on selling Leumi after an attempt to sell the stake in 2014 never materialized following finance committee approval.

The state last sold a 5 percent stake in the bank in 2011 for 1.3 billion shekels.

Nearly 89 percent of Leumi, which does not have a controlling shareholder, trades on the Tel Aviv Stock Exchange.

After the government’s stake, investment bank Altshuler Shaham has the second-largest holding at 4.73 percent, followed by the Vanguard Group at 2.11 percent.

The government bought up nearly all the shares of the country’s banks after a crisis in banking shares in 1983 but the country’s other top lenders — Hapoalim (POLI.TA), Israel Discount (DSCT.TA), Mizrahi-Tefahot (MZTF.TA) and First International FTIN.TA — have been fully privatised.

Leumi’s shares are up 6.1 percent so far in 2018 but they were down 1.3 percent to 22.31 shekels in afternoon trade in Tel Aviv.

Reporting by Steven Scheer; Editing by Elaine Hardcastle

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