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The Bank of Israel will agree to let Meir Shamir buy a 29% controlling interest in Israel Salt Industries (TASE: SALT), assesses banks analyst Alon Glazer of Leader & Co. assuming it does, Shamir's company Mivtach Shamir Holdings (TASE: MISH) will have earned, on paper, a cool NIS 100 million.

Mivtcah Shamir bought a 4.99% in Salt Industries and has an option to buy 25% more, or 10 million shares, though it needs the Bank of Israel's OK to exercise the option. 
 
Once that approval is forthcoming and the option exercised, Mivtach Shamir should realize a highly impressive profit on paper of about NIS 100 million from the investment in Salt Industries, Glazer calculates.
 
The option is exercisable at NIS 20 per Salt Industries share, while on the Tel Aviv Stock Exchange, the share price has reached NIS 29.
 
Glazer's investment rating for Mivtach is Buy and his price target is a generous NIS 100, compared with its present level of NIS 82 on the TASE.

Meir Shamir stock over two years



He also likes Mivtach for its entry into the banking sphere - Salt Industries owns a 7% controlling interest in Bank Hapoalim. The investment in Salt Industries will become a key component of Mivtach Shamir's portfolio.

Glazer believes Mivtach Shamir is trading at a significant discount. The value of its holdings is about NIS 880 million after deducting capitalized debt, tax, and general and management costs, while its market capitalization is just NIS 686 million.

The company is being "fined" by investors subtracting its overhead, he surmises, while not credited with future growth. But given the company's track record and optimism regarding its holdings, he thinks the upside for its share is greater than 30%.

The combination of the discount and experienced management, knowhow, and involvement in its portfolio companies persuades Glazer to counsel investors to buy the stock.

The investment in Salt Industries reduces Mivtach Shamir's dependence on Lipman Electronic Engineering (TASE, Nasdaq: LPMA) as its main investment, he adds, though the analyst believes Lipman will be reporting good results for 2005. Mivtach Shamir also has holdings in Gilat Satellite Networks (NASDAQ: GILTD), Scitex (Nasdaq: SCIX) and Tefron (NYSE: TFR).