Leumi Union Mulls Strike, Warns Possible Buyers Off

The Bank Leumi labor union, headed by Louis Roth, plans to resume disruptions of bank operations in the coming days, after talks with Leumi CEO Galia Maor have failed to make progress. The union will hold meetings in Tel Aviv today, along with legal adviser Benny Cohen, to discuss calling a strike or other labor sanctions at the bank starting tomorrow.

The union refrained from disrupting banking operations yesterday after Maor asked for a one-day "time-out." Most of the bank's branches were closed Tuesday as a result of a job action called to protest the privatization process.

The union also sent representatives to the offices of potential buyers of the bank yesterday. The representatives delivered letters warning that if the bank was purchased without first ensuring the workers rights, the buyers would be risking their capital. Envelopes containing bids in the sale of Bank Leumi are scheduled to be opened on Monday.

The union said that the treasury had broken a promise to allow Leumi workers to buy 6 percent of the bank at a substantial discount. That, the union wrote, "is grounds for a lawsuit against the state and the buyers."

The warning letters were handed out at the offices of IDB Holdings chair Nochi Dankner, attorney Yaakov Neeman, who represents the Cerberus-Gabriel-Ross consortium, attorney David Hodek, who represents the Zuckerman-Safra-Lowy group, attorney Dalia Tal, who represents Shlomo Eliahu, and attorney Effi Abrahamson and businessman Oded Tyrah, who represent U.S. businessman Bill Davidson.

MK Roman Bronfman yesterday demanded that Finance Minister Ehud Olmert and the Knesset Finance Committee immediately halt the Bank Leumi privatization process: "Instead of transferring ownership of the controlling core in the bank to an investment group, it should be issued on the stock exchange or the state-owned shares in the bank should be distributed to the public."

Finance Committee chair MK Yaakov Litzman agreed to a request from Bronfman and announced he would convene the committee to debate the privatization of Bank Leumi.

Late last week, a team from the Finance Ministry and Bank Leumi met with potential strategic investors, including Cerberus-Gabriel and Zuckerman-Safra-Lowy. The groups may have entertained high hopes of concessions, but the treasury and bank officials had nothing new to say. The treasury is firm about the terms of the sale and, mainly, about the pricing of stock options.

As things stand, the treasury means to sell a 9.99 percent stake to the highest bidder, along with an option for its remaining 10.01 percent interest. Exercise of the option would be contingent on a slew of regulatory approvals, while the purchase of the 9.99 percent interest is not.

Sources close to the process say the potential strategic investors were disappointed by the meeting, where they had expected to hear about concessions. The highest-placed representatives of the bidding groups did not even agree to go into the meetings with the treasury chiefs, in a broad hint of their intentions when the tender begins.

The treasury said only that not all the consortia have revealed their positions and that some remain in the running to buy the bank.