Contrary to market rumors, Migdal Insurance Holdings has not stopped buying Bank Leumi shares ahead of the state auction of its controlling interest in the bank.

Over the last two weeks Migdal, a Tel Aviv-traded company controlled by the Italian insurance giant Generali, bought 2.86 million Leumi shares for NIS 23.9 million. Migdal now owns 8.7% of Leumi's share capital.

Migdal CEO Izzy Cohen denied that the company was making a strategic investment in Bank Leumi. He explained that the investments were made using money from profit-sharing life insurance policies.

Migdal snapped up the shares on the Tel Aviv Stock Exchange in three instalments, refuting rumors that it had decided to wait and see how the state structures Leumi's privatization.

On May 3, Migdal bought 600,000 Leumi shares for NIS 5.1 million. On May 8 it bought another 910,000 shares for NIS 7.6 million and last Tuesday, on May 15, it acquired 1.35 million more for NIS 11.2 million.

Migdal has long since announced its intention to join a consortium that will bid for the controlling interest in Leumi, when the state sells its controlling stake.