Turkey’s Savings Deposit Insurance Fund cancelled the tender for Adabank after Hapoalim’s sole bid was declared too low.
28 November 10 16:56, Eran Peer
Bank Hapoalim’s (TASE: POLI) attempt to solve the problem of its Turkish subsidiary BankPozitif Credi Ve Kalkinma Bankasi AS lack of a deposit permit has failed. Turkey’s Savings Deposit Insurance Fund (TMSF) cancelled the tender for Adabank after the sole bid by Bank Hapoalim, $42 million, was declared too low.
TMSF set a $90 million target price for Adabank, reflecting a return on equity of 2.5 for the bank. Bank Hapoalim’s bid reflected a return on equity of 1.2.
Bank Hapoalim wanted to acquire Adabank, a small bank that was nationalized seven years ago, because it has a deposits from the public permit. Bank Hapoalim planned to merge it with BankPozitif, which can only expand by increasing its equity basis because it lacks a deposits from the public permit. As a result, BankPozitif is stagnating and its return on equity is low. Acquiring a bank like Adabank, which has a deposits from the public permit, would solve this problem.
Bank Hapoalim acquired the 69.8% controlling interest in BankPozitif four years ago. Bank Hapoalim expected that BankPozitif would obtain a deposits from the public permit, but the TMSF has refused to grant one.
Published by Globes [online], Israel business news – www.globes-online.com – on November 28, 2010
© Copyright of Globes Publisher Itonut (1983) Ltd. 2010
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