Bank Hapoalim Sells P.K.N. for NIS 950m

Solomon bid NIS 930-950 million for the entire mutual fund management company.

Only hours before the Yom Kippur fast began Wednesday, Bank Hapoalim sold its mutual fund arm P.K.N. to the Solomon Capital Markets group.

The deal was reached after Hapoalim held a type of auction for P.K.N. (Poalim Mutual Funds, also known as Pekan), asking all interested parties to submit offers.

Solomon, controlled by Amit Berger, Ilan Ben Dov and Roni Elroi, bid NIS 930-950 million for the entire mutual fund management company. The final signing of the arrangement is likely to take place Sunday.

P.K.N. is the largest manager of mutual funds in the economy, with some NIS 20.5 billion under its belt in 74 separate funds. The price of the deal reflects a ratio of some NIS 45 million for each billion shekels under management, NIS 10 million more (per billion) than what was offered by Solomon for Ilanot Discount (before the Discount Bank buyout), and some NIS 12 million (per billion of managed funds) more than what was paid by Harel insurance last month for Leumi bank's mutual fund arm Pia.

The recent bout of changing hands in the mutual fund sector is a direct result of the recently legislated Bachar capital market reforms, which forbid any bank from owning (directly or indirectly) mutual or provident funds, and dictate the time limits within which all banks - categorized as "major" or "other" - must sell their fund holdings.

In August, Solomon bought 45 percent of Ilanot Discount from Nochi Dankner's IDB group. In the end, however, Solomon had to forgo its dream of running the mutual fund group when Israel Discount Bank, in a move that surprised many, decided to exercise its right of first refusal, buying IDB's stake.