Text size
related tags

Israel has sold 5 percent of the country's third-largest bank to Deutsche Bank for a reported $210 million.

The Finance Ministry says the German bank will have an option to buy an additional 3.33 percent of Israel Discount Bank by Tuesday evening.

The ministry has not disclosed the price of the initial stake, but Israeli media reports said it was 800 million shekels, or $210 million.

The government held a minority 25 percent stake in Discount before the sale. It offered the shares to 10 foreign investment banks.

A group led by U.S. businessman Matthew Bronfman controls the bank with a 26 percent stake.

The state currently owns 25% of Discount Bank's equity shares, valued at NIS 2.25 million. It is seeking to raise about NIS 800 million from the current sale. The state has said it plans eventually to sell all of its holdings.

Accountant General Shuki Oren explained to Knesset members that a lump sale lets the state complete the process in a simple, straightforward manner, taking advantage of the stock's current high price while shielding the government from market fluctuations.

Oren added that the lump sale will let the government get the most out of the market. The timing and size of future lump sales will be decided by the Finance Minister based on market conditions, and reported to the Knesset Finance Committee.

At Oren's request, the Finance Committee approved the sale yesterday evening. The committee was convened for an urgent closed meeting before the close of trade Monday. Fourteen voted in favor, three voted against and one abstained.