Azrieli’s Bid Wins In Tender for Bank Leumi Stake

TEL AVIV (Reuters) – Azrieli Group said on Tuesday it submitted the winning bid to buy a 4.83 percent stake in Bank Leumi (LUMI.TA) from Cerberus Capital Management and Gabriel Capital Corp.

Azrieli will pay about 740 million shekels ($178 million), or 10.5 shekels per share, for the stake in Israel’s largest bank.

Leumi shares were down 0.8 percent at 10.57 shekels in morning trade.

Cerberus and Gabriel together held 9.8 percent of Leumi before the tender.

In a statement, Azrieli Group — controlled by Canadian businessman David Azrieli — did not provide further details.

“Bank Leumi bears great potential and the Azrieli Group will be happy to be part of realising this potential,” the statement said. “The Azrieli Group continues its strategic policy of carrying out large investments that are synergistic with its businesses.”

Azrieli has numerous investments in Israel, including several shopping malls. Israeli media said Azrieli was the only bidder in the tender.

Newspapers have said Cerberus and Gabriel decided to sell their stake jointly to boost liquidity in the wake of the global financial crisis and the Bernard Madoff scandal.

Money management firm Gabriel is run by Ezra Merkin, who has been charged by New York’s attorney general with secretly placing $2.4 billion of client funds with swindler Madoff.

Madoff pleaded guilty in March to running Wall Street’s biggest investment fraud involving as much as $65 billion over 20 years, including billions from feeder funds like Merkin’s.

As part of the government’s privatisation programme, Cerberus and Gabriel bought the stake in Leumi from the state in 2005 at 16.5 shekels a share.

(Reporting by Tova Cohen; Editing by Dan Lalor) ($1 = 4.15 shekels)