The board of Bank Hapoalim BM resolved to carry out a public offer of credit card unit Isracard Ltd.'s shares and listing them on the Tel Aviv Stock Exchange.
As part of the preparation for the process, the Israel-based bank transferred its entire holdings in subsidiary Poalim Express Ltd. to Isracard as part of a reorganization, and Isracard's board of directors declared a dividend totaling 867 million Israeli shekels, with Bank Hapoalim's share amounting to 851 million shekels. A payment of a separation bonus to Isracard employees and its office holders was also approved, subject to the completion of the sale offer and its terms.
Following completion of the offer, Hapoalim said it will continue with preparations to complete its separation from Isracard through a number of possible alternatives, including the sale of shares constituting a core of control of the credit card unit, a private sale with no core of control or an offer to the public of the bank's shares in the unit, the distribution of shares or purchase of call options through a dividend in kind, sale on the stock exchange or a combination of some of the said alternatives.
The offer would be for roughly 50% of Isracard's shares, Reuters reported March 10, citing a prospectus. The credit card unit is reportedly valued at 3 billion shekels, but could fetch higher.
Hapoalim intends to separate from the unit to comply with the provisions of Israel's law for increasing competition and reducing concentration in the banking market.
U.S. private equity firm Warburg Pincus LLC recently completed its acquisition of Bank Leumi le-Israel BM's credit card business, Leumi Card Ltd.
As of March 8, US$1 was equivalent to 3.63 Israeli shekels.