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Six months ago Prof. Amir Barnea estimated Bank Hapoalim's value to be NIS 16-17 billion. This weekend the Dankner family closed a deal setting the bank's worth at NIS 15.1 billion, but their major partner in the bank, Shari Arison, believes this is too high an estimate. Meanwhile, stock market investors are playing it safe, giving the bank a modest market cap of NIS 7.3 billion. Many players are involved in this game, each pulling in their own direction and placing a different price tag on the bank.

1. The starting point for the tangle is Hapoalim's market cap, which is now only NIS 7.3 billion. Investors are following the economic situation, the problems of the big debtors and the condition of the bank, and believe that balance sheets hide large losses on loans. This is why the price tag reflected on the stock market is 47 percent below the bank's equity.

2. From the beginning of 2002, a hole of hundreds of millions of shekels has opened in the balance sheets of the Dankners' Israel Salt Industries, because of the difference between the price it had paid for control of an 11.6 percent stake in Bank Hapoalim and the bank's market capitalization. Salt has commissioned an independent valuation from Prof. Amir Barnea, who in August determined the bank's value at NIS 16-17 billion. This valuation saved Salt from a multi-million write-off that would have erased the company's equity.

3. This weekend, the Dankners agreed on a deal designed to push forward the separation of Nochi Dankner's business from that of the rest of the family, and to advance the IDB and Ellern transactions. For the purpose of this deal, Bank Hapoalim was evaluated at NIS 15.1 billion. In this case too, with a lower valuation - Salt would have been forced to write off the value of its holding. But Nochi Dankner isn't really going pay for the purchase of Hapoalim stock, because his family will concurrently be buying his holdings in Salt and maybe also in Dor Chemicals. In such a swap, the official price tag attached to Hapoalim is irrelevant.

4. Shari Arison and Shlomo Nehama, who manages her business in Israel, have declared their readiness to help the Dankner family, the other other major shareholder in Hapoalim, and buy Nochi Dankner's stock. But the Dankners' should know that Arison and Nehama haven't even bought the much cheaper stock they could get on the Tel Aviv Stock Exchange.

5. Accountant Avi Berger said this weekend that in the long run, the value of the two big banks is the same as their equity. Namely, Bank Hapoalim's maximum value is NIS 13.7 billion.

6. The loan for Salt's acquisition of its stake in Bank Hapoalim was extended five years ago by Leumi bank. The securities for this loan comprised some of the acquired Hapoalim stock, and land in Atlit and Eilat. The market cap of Hapoalim is cardinal to Leumi, whose guarantees have been eroded. For a year now Leumi has been pushing Salt to boost the securities for this loan.

The multitude of price tags and players involved cannot whitewash the difference between Hapoalim's market cap and its book value in Salt's records. The gap cannot be maintained much longer In present market conditions, it takes a wild guess to figure out which of the powers will pull harder to bring the valuation closer to its end.