Nimrodi family in talks to take over Trade Bank

Operating via the Israel Land Development Corporation, the Nimrodi family plansto buy control over a commercial bank. Specifically, it wants to take over Trade Bank.

TheMarker.com has learned that the ILDC, which the Nimrodis control, will be proposing to buy the controlling interest in the bank from businessman Szmil Weber.

ILDC purchased a 10% interest in Trade Bank from Weber back in August 1999. Szmil Weber owns 30% of the bank's share capital. Another 20% is owned by the Ireni family and the public owns the remaining equity.

In the past, the Ireni family had the controlling interest in the Central Securities Company, today known as Kardan Investments.

Trade Bank has one branch on Lillenblum Street in Tel Aviv, and another branch in Be'er Sheva. It is traded on the Tel Aviv Stock Exchange at a company value of $5.3 million. Its equity value is $11.5 million.

A source familiar with the deal said that if the Nimrodis will have to pay a premium to buy control over the bank. The bank's value for the purpose of the deal will probably be around $15 million.

To buy control of Trade Bank, ILDC will need the approval of the Bank of Israel.

ILDC could then draw on Trade Bank to provide part of the credit it needs for its wide-ranging interests, including real-estate (ILDC), ILD Hotels, communication (Ma'ariv), music (Hed-Artzi), and cable TV (Matav Cable Systems (Nasdaq:MATV)). Lending to ILDC would increase the banks' volume of activity and upgrade its value. When buying the 10% interest in the bank from Szmil Weber, ILDC received a warrant to buy another 10% of the bank's equity by February 2001. The option expired without being exercised.

The parties further agreed that if Weber sells his holdings in Trade Bank, the Ireni family would have the right to sell its holdings. ILDC may find itself forced to acquire the stake of the Ireni family, or forgo the whole business.

ILDC Director and Acting CEO Ron Weissberg recently met with financiers in the United States to look into recruiting a foreign investor for Trade Bank in order to leverage its business.

Trade Bank has a staff of 50. Its net profit in 2000 dropped to NIS 510,000, compared with earnings of NIS 1.3 million in 1999. Yield on equity came to 3%.

ILDC declined to comment.

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