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Last weekend, the Recanati and Carasso families signed over their controlling share of IDB Investments to a group of investors headed by Nochi Dankner, and including Yitzhak Manor and Avraham Livnat.

The signing of the agreement is just one stage in the ownership transfer, which also requires the approval of the supervisor of banks, Yitzhak Tal, and Antitrust Commissioner Dror Strum. Securing their approval will be neither quick, nor easy, mainly due to a few weighty financing issues.

Dankner, who is currently a member of the group that controls Bank Hapoalim, will have to sell his holdings in that bank as a condition for finalizing the IDB deal. This is because IDB is one of Hapoalim's largest borrowers and if Dankner were to retain his holdings in Hapoalim, the IDB deal would significantly increase the credit extended by the bank to organizations connected to people with a controlling interest in it. The Bank of Israel's directives state that credit to controlling parties in a bank cannot exceed 10 percent of the bank's equity. The Arison-Dankner group, which controls Hapoalim, has already overstepped this limit and Tal will not let it increase its deviation any further.

Even after Dankner sells his share in Hapoalim, he will not have solved all his problems. Buying IDB will immediately turn him into one of the biggest borrowers in Israel - firstly, due to the massive sum he will have to raise to implement the deal; and secondly, from the mammoth debts he will acquire along with IDB, which owes a few billion shekels to local banks.

Another issue that Tal will be investigating concerns one of IDB's less dynamic holdings - 13.2 percent of Discount Bank. This holding is a historical remnant from the time when the Recanati family, which founded the bank, also controlled it. In recent years, the Recanatis have expressed renewed interest in acquiring the bank.

Now the transfer of IDB to Ganden, and its partners, Manor and Livnat, will require a thorough review by the central bank before the acquisition of Discount can be approved. Dankner and Manor, who is one of the controlling shareholders of Bank Igud, have already passed their examination by the central bank, though the other members of the Ganden group and Livnat have not. Ganden includes some anonymous investors, whose chances of passing the check are unknown. If the entire group gets approval, it will open the way for the future possibility that Dankner may organize a group to take over Discount.

That day is a long way off, however, because the path to such an acquisition is strewn with obstacles. The Bank of Israel and Discount, however, find the possibility intriguing. Discount needs private owners who will carry it, and the central bank is also seeking the total privatization of the banks.

Yesterday, Dankner began his quest for financing for the deal, estimated at $540 million, of which some $530 million will probably be borrowed from the banks. How does one repay such a sum in a reasonable amount of time? By improving performance, realizing assets and disbursing dividends.

Of IDB's host of assets, the two that have the greatest potential for improvement are actually the ones that are having the most difficulty right now - the Tevel cable television company and Discount Bank, both of which are problematic companies that are registering losses.

Tevel is currently being run by a special court-appointed manager and is having difficulty paying its debts. If the planned merger with the other cable companies goes through, however, and the recovery plan formulated by accountant Zvi Yochman is implemented properly, Tevel should soon be back in the black.

Discount's problems are a different story, as its ills stem from losses incurred from massive bad debts in recent years. The bank is also staggering under the burden of its huge payroll and its equity level prevents it from increasing its credit portfolio. Of all of Israel's banks, Discount is at the lowest value in relation to its equity - just 40 percent (the bank's market value, according to its share price, is $509 million, while its equity is $1.2 billion). All these factors do not make Discount a bad asset. On the contrary, the high quality of the bank's retail customers, its holdings in good subsidiaries such as Discount New York, Discount Mortgage Bank and Israel Credit Cards (Visa CAL), are still very good assets that can provide profits and positive cash flow for years.

Banking industry sources feel that a good recovery plan, which includes the closing of some branches, cuts in manpower and perhaps the sale of a few assets, will make the bank very attractive to investors. Dankner has the ability to make this happen. He is daring, willing to take risks and has respectable experience as a banker, after five years as a director of Hapoalim. The question remains as to whether he still views banking as a business challenge.

In order to gain a controlling stake in Discount, IDB will have to buy an additional 12 percent of the bank's equity. At today's prices, this is not a big sum, but there are likely to be some regulatory hurdles. First, Tal has mentioned more than once how reluctant he is to allow businessmen with concerns throughout the economy to control the banks. IDB is already one of the biggest borrowers in the economy, and if such a group owns a bank, it could expose the bank to risks stemming from its other holdings.

The second problem is the financing. The Dankners financed their purchase of their stake in Hapoalim with a NIS 1.4 billion loan from Leumi. Tal did not like this arrangement, which, he felt, increased the risk of a domino effect if one bank ran into trouble. Tal has, therefore, limited the amount that can be loaned from one bank to buy another. In order to buy more of Discount, Dankner and his partners will have to invest more of their own money.

The third problem is that of concentration. Will the central bank let two of the three large banks be controlled by people whose surname is Dankner? Will Nochi's friendship with Hapoalim's president, Shlomo Nehama, and with Nehama's deputy, Nochi's cousin, Danny Dankner, prevent him, at least for the present, from turning Discount into a dynamic bank that will lead to aggressive competition in the banking system?

At least one of Nochi Dankner's partners, Manor, has already expressed an

interest in gaining control of Discount, when he contended for the purchase of the bank as part of the Shlomo Eliyahu group.

In response to all this speculation, Ganden's spokesman said: "Until the group has purchased IDB de facto, we have no intentions of discussing our plans concerning IDB or the companies connected with it, either directly or indirectly."