Dankner Goes for Hapoalim

Nochi Dankner, owner of IDB Holding, is continuing his hunt for major investments, this time heading negotiations that will enable him to hold a controlling stake in Bank Hapoalim alongside billionaire heiress Shari Arison. The move, estimated to cost upward of $500 million, will spell the end of control of the bank by the rest of the Dankner family and non-Israeli investors.

Through his IDB Development Corporation, Dankner is negotiating to buy out the family's 65-percent stake in Israel Salt Industries, which in turn holds 6 percent of Bank Hapoalim. In addition, Dankner is involved in talks to pick up the 5.5 percent held by the non-Israelis in the group.

If successful, Dankner would hold 8.5 percent of the bank's shares. Together with Arison's 11.5 percent, the two would clear the 20-percent hurdle and would be considered to be holding a controlling stake.

Experts believe Dankner will carry out the purchase process using his own resources from the companies and his group and, if necessary, with financing from a foreign bank. Dankner is expected to get the approval of the Bank of Israel for the deal, provided he sell his holdings in Clal Insurance.

The two deals are dependent upon one another because regulators do not allow one investor to hold both an insurance company and a bank, which can compete with each other for various services that are offered to the public. Regulators previously gave Dankner approval in principle to take control of Bank Leumi on condition that he would sell off Clal. IDB Holdings is thought to be prepared to sell off Clal.

Capital markets sources said they believed Dankner had already reached initial understandings with the supervisor of banks regarding conditions for having the bank deal approved. They stressed that initial understandings were also obtained with Dankner's relatives about the sale, and that the family sees the move as a means of solving internal family conflicts which have dragged business down.

The sources added that Arison is involved in secret talks in this regard and has given them her blessing.

For Dankner, this deal would close a circle, after he led the family's acquisition of a controlling stake in Hapoalim in 1997 through Salt Industries, together with his cousin Danny Dankner. Nochi Dankner was appointed vice chairman of the bank, and only after he started cutting ties with his family, did he transfer this position to Danny.