Bank Hapoalim mulls buying Greek bank

If a deal is made, it will be Hapoalim’s largest acquisition of a foreign bank to date.

Bank Hapoalim (LSE: BKHD; TASE: POLI) is reportedly conducting a preliminary examination for the acquisition of 51% of Proton Bank SA (Athens:PRO). The Greek bank has a market cap of €683 million, suggesting an investment of at least €350 million (NIS 2 billion). Bank Hapoalim may also pay a control premium, which would boost the final price.

If a deal is closed, the price tag could amount to more than a tenth of Bank Hapoalim’s shareholders’ equity, and would be its largest acquisition of a foreign bank to date. Bank Hapoalim declined to comment on the report.

According to reports in the Greek media, Bank Hapoalim is negotiating with IRF Fund, which owns 20% of Proton Bank, and with Greece’s Omega Bank, for their stakes in the bank. Proton Bank published a statement implying that the reports in the Greek media were incorrect.

The acquisition of a Greek bank fits with Bank Hapoalim’s global expansion strategy, which focuses on countries in Middle East, such as Turkey, and Eastern Europe, such as Russia and the Ukraine. The bank has been seeking a Russian or Ukranian bank to buy, and has even examined options in Vietnam. Last year, it completed its takeover of Turkey’s BankPozitif, and is now in the process of acquiring a bank in Kazakhstan.

Clal Finance Batucha banking analyst Yuval Ben-Ze'ev welcomes the move, which he sees as compatible with Bank Hapoalim’s strategy.

Proton Bank started out as investment house specializing in asset management, and subsequently expanded into retail banking. It has €399 million in shareholders’ equity.

Published by Globes [online], Israel business news - www.globes.co.il - on October 11, 2007

© Copyright of Globes Publisher Itonut (1983) Ltd. 2007

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