Text size

The shock waves from Bank Leumi's sale of Leumi Pia mutual funds to the Harel Insurance company at the end of last week are still reverberating. The sale has led to a number of reactions in the local capital market. Players are busy guessing which company is next in line to be sold, which businessmen are holding talks with which bankers, and what prices will be paid. The entire sector is filled with rumors about companies and funds, which, it appears, were bought out by others.

The joke heard around the markets is that these rumors are the only subject for which no one says, "We'll talk about it after the holidays." Everyone involved in high finance or investments wants to sit down to the holiday table with a new fund in his basket.

But underneath the surface, there are real discussions going on. Bank Leumi was the first to close a deal and broadcast that it is ready to make another deal if the price was right. Over the past few days, the bank has received a flood of offers to buy its Psagot mutual funds. Buyers are also lining up for Leumi's provident and educational funds as well.

It seems that Hapoalim and Israel Discount Bank do not want to be left behind either. Haaretz has learned that both are negotiating intensively to sell part of their assets, and Hapoalim is talking with Clal Insurance about the sale of its Pekan mutual funds.

Hapoalim holds 14 percent of Clal Insurance. Clal's controlling shareholder, Nochi Dankner, was one of Hapoalim's controlling shareholders and still holds bank shares through Salt Industries, although they are being held in trust. His family are part of the bank's controlling block.

Pekan manages about NIS 20 billion in assets. If the Leumi Pia deal is a measure of the price to be paid for the funds, the Pekan deal should be worth NIS 650 million. The average management fees for Pekan are 1.22 percent, which translates into about NIS 250 million in annual revenues and profits of NIS 60-70 million.

"We have been approached by a number of bodies," Bank Hapoalim said. "We are examining [the offers] and continuing to examine, as we reported, the possibility of a spin-off of our holdings in mutual and provident funds."

Clal Insurance replied that it is in contact with various firms to discuss the purchase of mutual funds. "The company is interested in expanding into funds, but at this stage, we have nothing to report," the company said.