By Steven Scheer
JERUSALEM, July 27 (Reuters) - Swiss bank UBS said on Monday it had bought an 8.33 percent stake in Israel Discount Bank for 560 million shekels ($147 million) from the Israeli government and placed the shares with clients.
The state now holds an 11.67 percent stake in Discount, Israel's third largest bank.
UBS, which beat three other foreign banks in the tender, bought the shares in Discount at 6.803 shekels each, which was a nearly 2 percent discount to Monday's closing price of 6.93 shekels.
Discount's shares closed 1 percent lower at 6.86 shekels compared with a 0.7 percent gain on the broader Tel Aviv bourse.
UBS said it sold the shares to its institutional clients, mostly foreign ones.
Earlier on Tuesday, UBS bought a 5 percent stake in Discount for 340 million shekels and received an option to buy another 3.33 percent at the same price by the end of the day.
The Finance Ministry approached nine foreign investment banks late on Monday and asked them to submit bids to buy a 5 percent stake in Discount. Only four did so.
It said the decision to sell the shares came after recent interest by foreign investors.
In similar fashion, Israel sold 5 percent of Discount through Deutsche Bank in January for 435 million shekels -- or 8.871 shekels a share. At the time, Deutsche declined to exercise an option for 3.33 percent more. .
The Bronfman-Schron group, led by U.S. businessman Matthew Bronfman controls Discount with a 26 percent stake.
Israel's government has long said it seeks to get rid of its stakes in Discount and in Bank Leumi, Israel's largest bank in which the state is the controlling shareholder.
A Finance Ministry spokesman said the ministry had no concrete plans to sell the remaining stake in Discount.
'After we close the deal (with UBS) we will consider the next step,' he said prior to UBS exercising the option, noting that as part of the agreement with UBS, the state cannot sell any more of the bank for three months.
He added that a sale can be made via the stock exchange, to foreign banks or directly to a strategic investor depending on demand and market conditions.
(Editing by Karen Foster)
($1 = 3.80 shekels) Keywords: ISRAELDISCOUNT UBS/ (steven.scheer@thomsonreuters.com; +972 2 632 2210; Reuters Messaging: steven.scheer.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
JERUSALEM, July 27 (Reuters) - Swiss bank UBS said on Monday it had bought an 8.33 percent stake in Israel Discount Bank for 560 million shekels ($147 million) from the Israeli government and placed the shares with clients.
The state now holds an 11.67 percent stake in Discount, Israel's third largest bank.
UBS, which beat three other foreign banks in the tender, bought the shares in Discount at 6.803 shekels each, which was a nearly 2 percent discount to Monday's closing price of 6.93 shekels.
Discount's shares closed 1 percent lower at 6.86 shekels compared with a 0.7 percent gain on the broader Tel Aviv bourse.
UBS said it sold the shares to its institutional clients, mostly foreign ones.
Earlier on Tuesday, UBS bought a 5 percent stake in Discount for 340 million shekels and received an option to buy another 3.33 percent at the same price by the end of the day.
The Finance Ministry approached nine foreign investment banks late on Monday and asked them to submit bids to buy a 5 percent stake in Discount. Only four did so.
It said the decision to sell the shares came after recent interest by foreign investors.
In similar fashion, Israel sold 5 percent of Discount through Deutsche Bank in January for 435 million shekels -- or 8.871 shekels a share. At the time, Deutsche declined to exercise an option for 3.33 percent more. .
The Bronfman-Schron group, led by U.S. businessman Matthew Bronfman controls Discount with a 26 percent stake.
Israel's government has long said it seeks to get rid of its stakes in Discount and in Bank Leumi, Israel's largest bank in which the state is the controlling shareholder.
A Finance Ministry spokesman said the ministry had no concrete plans to sell the remaining stake in Discount.
'After we close the deal (with UBS) we will consider the next step,' he said prior to UBS exercising the option, noting that as part of the agreement with UBS, the state cannot sell any more of the bank for three months.
He added that a sale can be made via the stock exchange, to foreign banks or directly to a strategic investor depending on demand and market conditions.
(Editing by Karen Foster)
($1 = 3.80 shekels) Keywords: ISRAELDISCOUNT UBS/ (steven.scheer@thomsonreuters.com; +972 2 632 2210; Reuters Messaging: steven.scheer.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
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