Leviev Increases Africa-Israel Stake to 80% after Bank Leumi Sale
February 02, 06
Israeli diamond trader Lev Leviev has increased his stake in real estate company Africa-Israel after new Israeli banking regulations were passed that require Bank Leumi to decrease its holding in the conglomerate.
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The bank sold Leviev its entire 15.83 percent holding for 150 shekels per share ($32), two percent below yesterday’s closing price, and registered a profit of 502 million shekels ($107 million) after tax. The transaction will cost Leviev about 1.12 billion shekels ($240 million) and raise his holding in the company to 80 percent.
A conglomerate, according to Israeli law, is a corporation with over 1.73 billion shekels ($371 million) in equity and active in more than three industries. Bank Leumi had holdings in three conglomerates: The Israel Company, Menorah, and Africa-Israel. The new banking regulations limit banks’ holdings to no more than one conglomerate.
Leviev chose to buy Leumi shares even though the share price is at nearly record prices. The Israeli financial market viewed this as a vote of confidence by Leviev in the company, who preferred the purchase over a new partner in the firm.