Shari Arison Says Might Cut Her 20% Stake in Bank Hapoalim

Shares held by Arison Holdings could go to a foreign investor to boost the bank’s business abroad.

Tess Scheflan

Businesswoman Shari Arison says her Shari Arison Holdings is considering selling most of its 20% stake in Bank Hapoalim, the country’s largest bank.

The stake is currently just above 20%. According to regulatory requirements, if Arison Holdings wanted to cut the stake below 20%, the holding would have to fall below 5%.

Arison has already sold all the shares in the bank she owned personally.

The firm “receives, initiates and studies from time to time proposals regarding bringing in new investors to Bank Hapoalim ... to further develop and expand the bank’s activities, with a special emphasis on international operations,” a spokeswoman for Arison told Reuters on Monday, following up on a statement on Sunday.

The financial daily Globes reported that Arison was considering selling a stake to a foreign investor to improve the company’s international business. Globes said there had been no firm contacts with investors, but Arison had decided to “seriously consider offers on the matter.” A source told the paper that if the offer were attractive enough, Arison might sell the entire stake.

Bank Hapoalim controlling shareholder Shari Arison.
Nir Keidar

But taking on a partner in the 20% holding might prove thorny due to a 2012 Bank of Israel policy paper. In that document, the central bank said it wanted any new controlling shareholder group to hold a stake of at least 30% in Hapoalim.

The bank has sought to expand overseas because growth in Israel is limited. The bank already has branches in New York, Miami, London, Paris and Zurich, and has representative offices in Canada, Russia, Latin America, Europe and Asia.

Hapoalim has shown interest in middle-market commercial banking in the United States, which bank officials say would justify the acquisition of an American bank as a growth driver. Hapoalim already is a better profit engine than its Israeli peers and has the prospect of even better earnings on the back of streamlining.

But Hapoalim faces regulatory uncertainty; the new finance minister, Moshe Kahlon, has expressed a desire to enhance competition in the banking sector. Also, more than 30 bills on banking have been submitted during the Knesset’s current session.

On Monday, Hapoalim shares ended 1.6% higher on the Tel Aviv Stock Exchange. Some 74% of Hapoalim’s shares are in free float. Most of the shares are held by Israeli institutional investors, but foreign demand has been growing.