TEL AVIV: Bank Leumi, Israel's second largest bank, has begun selling its nearly 10 percent stake in Migdal Insurance and Financial Holdings to institutional investors, a market source said on Thursday.
"Leumi has sold five percent and the process is still going on. It's possible the entire 10 percent stake could be sold," said the source, who asked not to be identified.
The sale is expected to be concluded later on Thursday and the final decision as to how much to sell will depend on demand.
The price has been set at 5.72 shekels a share, a 2.2 percent discount to the opening price of Migdal on Thursday.
Migdal shares were down 2.2 percent to 5.722 shekels in late morning trade.
Other details were not available, but Calcalist, an Israeli economic newspaper, said on its website that the funds from the sale of Migdal will help Leumi meet its core capital requirements set by the bank of Israel
Leumi needs to reach a core Tier I capital ratio of 9 pct by the end of 2014. it was at 8.6 percent at the end of the third quarter of 2012
Leumi's subsidiary Leumi Partners is carrying out the sale.
Migdal, Israel's largest insurer, has a market value of 6.15 billion shekels.
"If and when we have something to announce, we will issue a formal statement," a spokeswoman for Leumi said.
Late last year Israeli businessman Shlomo Eliahu bought a 69.1 percent stake in Migdal from Generali for 705 million euros. (Reuters)
