The two partners in the controling interest in Bank Hapoalim, Shari Arison and Dan Dankner, failed to reach an agreement yesterday following an hour and a half discussion during which each side presented its points of view, but neither showed any willingness to accept the other's position. The only agreement was to wait and put off any decision until after the holidays.
Arison owns 11.5 percent of the 20 percent controling interest, while Dankner represents his family's holdings of 3 percent of the controling stake, which it holds through Israel Salt Industries.
It seems that Arison was unwilling to accept the alternatives offered by Dankner concerning the controling interest. At the same time, the only offer Dankner appeared to receive from Arison was that she was willing to continue to make significant decisions about the bank, such as the choice of CEO or chairman, in consultation with Dankner even though she has an absolute majority in the controling interest.
The disagreement between the two sides came to the fore after Arison blocked an attempt by Nochi Dankner to buy out the American shareholders in the controling interest. Arison signed an agreement to buy their 5.5 percent holding in the controling stake - a move that would give her an 85 percent share of the controling interest and thus make her the sole decision-maker at the bank, as a 75-percent majority of the controlling interest is required for major decisions.
Salt Industries announced in response that they had first right of refusal over the Americans' shares. Arison claims that the Dankners have the right of refusal only over a small portion of the shares, which would in now way affect her complete control.
According to sources, prior to yesterday's meeting, the Dankner family had planned to offer Arison a number of alternatives - based on the assumption that their first right of refusal on all of the Americans' shares would entice Arison to agree to one of their proposals. They proposed that she buy out their stake in the controling interest at a fair price, or that she buy the shares through the purchase of Salt Industries.
Another possibility would be a share swap in which they would give Arison their restricted controling shares in return for regular, unrestricted shares - with a control premium thrown in. Only if the Dankners buy the entire 5.5 percent of the American stake could they return to their position of influence in the bank. As long as Arison holds over 75 percent of the controlling interest, she would be able to exercise total control.
The Dankners' real interest at the meeting was to convince Arison to help let them out of their stake in the bank, directly or otherwise. The money they would receive from any such buyout would allow the Dankner family to pay off much of their debts and serve as capital to start again. It would also provide them a base for a renewed position in the Israeli business world.
And finally, in the event that after the holidays the two sides still cannot reach an agreement on control of Israel's largest bank, Arison and the Dankners may yet find themselves face-to-face in court.
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