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Tshuva taking aim at Bank Leumi By Eti Aflalo It looks like real estate and energy baron Yitzhak Tshuva is now eyeing the banking sector. Tshuva owns the controlling interest in the Delek group of companies, which encompasses real estate, energy and vehicle importing, and also owns the controlling interest in the Phoenix insurance company. Now Tshuva apparently has his eye on a 5% interest in Leumi, Israel's biggest bank in terms of market cap. Advertisement The 5% share at hand is currently owned by Ezra Merkin's hedge fund Gabriel Capital, and several local market players have been expressing interest. Market circles claim potential buyers include Apax Partners and former Bank Hapoalim chairman Shlomo Nehama - and now Tshuva, too. In December 2008 Merkin said Gabriel would be selling its holdings and closing shop in the wake of the Bernard Madoff fraud. Since then, Leumi's top brass have been receiving calls about Gabriel's stake in the bank. The timing isn't fortuitous, from Gabriel's perspective: Leumi shares lost 42% of their value last year. The Cerberus-Gabriel Group bought 9.9% of Leumi about three years ago, when the government decided to privatize the bank. The group wanted the controlling stake, but found its bid foiled because of regulatory constraints. Ultimately, the group was forced to split the interest equally between the two hedge funds, Cerberus and Gabriel. Another rumor is that whoever buys Gabriel's share of Leumi would try to buy Cerberus' stake, too. Forget it, say sources near Cerberus: It isn't selling. Not right now, anyway. The Gabriel management might be just testing the waters, trying to find out what price it could get for its Leumi holding and the chances that the Bank of Israel would approve the sale. In any case, Tshuva would have to overcome a few hurdles to join the circle of controlling shareholders in Leumi. Finding financing for such an acquisition is the most formidable problem. Apparently, Tshuva wouldn't be carrying out the acquisition through Delek Group, but would pursue it through one of his private companies. In any case, it's dubious whether Delek Group will have the wherewithal. Granted, it's deeply involved in the Tamar-1 exploration, which found a huge field of natural gas in the Mediterranean. But investment in Tamar-1 will be enormous, for one thing. Also, the various Delek Group companies will need their resources to cover existing liabilities. One such, a sore point for the group, is Phoenix Insurance's purchase of a stake in Excellence Nessuah for NIS 700 million, a transaction it has been trying to cancel. Another snag in any plan to purchase a chunk of Leumi is Tshuva's current holdings: He already owns 2%-2.5% of Leumi, and controls Phoenix. If he really wants to buy both Gabriel's and Cerberus' holdings in Leumi, he'd have to sell part of Phoenix: The rules won't let him own more than 10% in more than one financial institution, including banks and insurance companies. "There has been no decision to buy Leumi shares from Gabriel," was all a spokesman for Tshuva would say. Bookmark to del.icio.us   967 days of captivity Officials say Israel may authorize terms for Shalit deal Wednesday. Muslim superheroes A new comic book features a new kind of character to battle radical Islam.

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