Israeli government gets Bank Leumi sale approval

JERUSALEM, Nov 3 (Reuters) - Israel's parliamentary finance committee gave its approval on Wednesday for the government to sell its 11.46 percent stake in Leumi LUMI.TA, Israel's largest bank.

The state holds a controlling 11.46 percent of Leumi, which is worth about 2.9 billion shekels ($800.3 million). It intends to sell 1 percent to Leumi employees.

The finance committee gave the government six months to complete the sale.

The Finance Ministry has not yet detailed how it intends to sell Leumi. Officials have said they wish to sell the 10.5 percent stake by the end of the year, likely in packages of 3-5 percent with an option for more. [ID:nLDE65D0W6]

That would be similar to the government's sale of Israel Discount Bank DSCT.TA, the country's third-largest bank.

Last week, the state sold its remaining 11.69 percent holdings in Discount to U.S. banking group Citi C.N, who resold the stake to its clients. It also sold smaller stakes via Deutsche Bank and UBS during 2010 to cut its stake from 25 percent. [ID:nLDE69P0LP]

Once the stake is sold Leumi will be without a controlling shareholder.

Leumi’s next largest shareholder is businessman Shlomo Eliahu with 9.59 percent. Eliahu has expressed his intent to form a group that would seek control of Leumi.

During the finance committee’s debate the head of Leumi’s workers union demanded that an agreement be made with the bank’s workers or they would “shut down the bank.” ($1=3.61 shekels) (Reporting by Steven Scheer; Editing by Greg Mahlich)