Safra family considering buying Bank Leumi

The Safra family has joined the list of candidates competing for the controlling interest of Bank Leumi.

Since the failure of the Cerberus-Gabriel fund to extend its option for the purchase of an additional 10 percent of the controlling interest became official, Joseph Safra and his son Jacob are reconsidering the possibility of purchasing the bank's controlling share.

Among other steps, they recently approached the Finance Ministry and attempted to determine how the state intends to conduct the sale of its remaining shares in Leumi.

The Safra family, a leading international banking group, previously owned the First International Bank in Israel, but sold its holdings to Zadik Bino in 2003.

Therefore, it seems likely that the family will not have any problems receiving approval from the Bank of Israel to control the bank. In 2005 the family closed out its main business interests in Israel when it sold its shares of cellular operator Cellcom to Nochi Dankner's IDB. Now the Safras may face IDB and Dankner in their bid for Leumi.

The family owns a number of banks around the world, in North and South America and Europe. Joseph Safra, the youngest of the three Safra brothers, is responsible for the family's banking holdings in Brazil, which include Banco Safra. The family usually holds at least 50 percent of the banks they manage, but in the case of Leumi the Safras are likely to settle for a smaller share due to the size of the bank.

Joseph Safra was one of a group of investors, along with Frank Lowy and Mort Zuckerman, that considered participating in the original tender for Leumi in 2005. However, the group decided to quit the race a week before the last date for bidding of the tender.

The Safras have also started preliminary contacts with Cerberus-Gabriel, which still owns 9.99 percent of Leumi. The hedge fund is required to sell 5 percent of Leumi in the coming year.

One possibility is that the Safras buy the 10 percent offered by the state as well as the 5 percent the funds need to sell - to establish a 15 percent holding and a majority of the 20 percent controlling interest. In addition, if the Safras do decide to bid on Leumi, they are also expected to approach Shlomo Eliyahu, who owns 10 percent of the bank. They are expected to ask him if he wants to sell them his share, or if not, whether he is interested in reaching an agreement over control and management of Leumi.