UBS of Switzerland to Buy 5% Stake in Israel Discount Bank From Government

UBS AG, Switzerland’s biggest bank, will buy a 5 percent stake of Israel Discount Bank Ltd. from the Israeli government for an undisclosed price.

UBS was one of four foreign financial institutions that made a bid for Israel’s third-largest lender, the Finance Ministry said in an e-mailed statement today. Further details will be released after the sale is completed, it said.

The sale of the Discount Bank stake was the second by the government this year, after Deutsche Bank AG in January bought 5 percent. The German bank that month said it planned to resell the shares to institutional investors. The government still holds 15 percent of Discount Bank. Israel is also planning to sell its remaining 11.46 percent stake in Bank Leumi Le-Israel Ltd., the country’s largest lender.

UBS will have the right to exercise an overallotment option for another 3.33 percent within 24 hours, and the government will not sell more shares in the bank for a three-month period, the ministry said yesterday prior to the sale.

Discount fell for a second day, declining 1.2 percent to 6.846 shekels at 12:07 p.m. in Tel Aviv.

To contact the reporter on this story: Calev Ben-David at cbendavid@bloomberg.net Alisa Odenheimer in Jerusalem at aodenheimer@bloomberg.net

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