The battle over controlling Israel's biggest bank, Bank Hapoalim, escalated yesterday. The Dankner clan, minority controlling shareholders in the bank, is considering offers from a potential new investor in Israel Salt Industries, which owns a 3% controlling stake in the bank.
The move is seen as a bid to strengthen their hand in the event that Salt's board decides to purchase the controlling stake in Hapoalim owned by "American investors" Len Abramson, Michael Steinhardt and the heirs of oil baron Charles Schusterman, who together own 5.5% of the controlling interest.
Yesterday, Salt Industries clearly stated that it had the right of first refusal on these shares. Associates of the United States investors, however, claim that Israel Salt's right of refusal is partial only.
They add that the sale of their Hapoalim stake to Shari Arison - a move that would effectively give her full control of the bank - is a done deal.
Observers in the capital market believe, that the Dankners are flexing their muscles in the hope that Arison will now purchase Salt Industries' Hapoalim shares. But Associates of Arison say that she has made it clear privately that she will not buy them.
While the controlling shareholders of Bank Hapoalim duke it out, the Bank of Israel has 60 days in which to approve or reject Arison's acquisition of the U.S. group's shares. Sources close to the deal are convinced that the central bank is likely to give it the nod in the belief that it will make the management of the bank more stable: Financial stability is one of the factors in the Bank of Israel's approval of stock swaps in the controlling stake of any bank.
Sources close to the Dankner family, however, are sure that the central bank does not want a single person controlling the country's biggest bank, especially when it was the late Ted Arison, and not his daughter, who was originally given control.
Israel Salt Industries announced yesterday that its corporate counsel had affirmed the company's right of refusal over the entire 5.5-percent controlling stake in Hapoalim owned by the U.S. investors. The company has not yet decided whether to exercise its rights. A source close to the Dankner family said yesterday, however, that "the Dankners of Israel Salt are no different than Nochi; they, too, don't like sticking around where they're not wanted."
Last week, Nochi Dankner backtracked on his own intention to purchase the American shares after Arison made it clear that she did not want him to have a controlling stake in the bank.
The sources close to the Americans claim that Israel Salt's right of first refusal applies only to part of their shares, proportionally to their share in the controlling stake in Hapoalim.
They also rejected claims by sources close to Salt that the company had full right of refusal as a result of a procedural error related to the date on which the agreement with Arison was signed.
"They're wrong. In any event, whether we had approached them before the signing or after, they can't purchase more than their relative share and they know this. They are making claims that won't get them anywhere," the sources close to the Americans said.
Arison's associates agreed with this opinion, asserting that the Dankners' right of refusal was partial only. They further claimed that if the Dankners exercised their right and bought shares from the Americans, Arison could in any event buy enough shares to guarantee her total control of Hapoalim.
"Shari Arison has complete control of the bank," Arison's spokesperson said yesterday.
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