F.I.B.I. Holdings Ltd., the parent company of First International Bank of Israel Ltd., surged after it said controlling shareholders are seeking direct ownership of the country’s fifth-largest bank.
The holding company’s shares advanced 12 percent, the most in more than four years, to 70.66 shekels at the market close in Tel Aviv. Trading was four times the three-month average daily volume. First International Bank dropped 5 percent to 51.66 shekels as the TA-25 benchmark index dropped 0.8 percent.
The company said yesterday after markets closed that its controlling shareholders are in talks with the country’s bank regulator to allow them to directly hold a stake in the lender. The holding company may do this by dividing most of the shares in the bank as a dividend to F.I.B.I. shareholders and also through a sale of the bank’s shares held by the holding company to pay off debt, according to a filing to the Tel-Aviv Stock Exchange yesterday.
“The move is positive for F.I.B.I. shareholders as the discount to its net asset value should close,” Zach Herzog, head of sales at Psagot Investment House Ltd. said today by phone from Tel Aviv. “We assume the owners will look to distribute up to 7 percent of the shares of First International Bank to the market to pay back debt of F.I.B.I. and that will put pressure on First International shares.”
F.I.B.I. holds a 53.53 percent stake in the bank valued at about 2.8 billion shekels, according to data compiled by Bloomberg. The holding company’s current market value is 1.86 billion shekels. First International Bank shares advanced 60 percent in 2012, bringing its market value to 5.2 billion shekels.