Israel Discount Bank seeks to buy Dexia Israel for 670 mln shekels

TEL AVIV, Sept 12 (Reuters) - Israel Discount Bank said on Wednesday it has offered to buy Dexia Israel Bank Ltd for 758.59 shekels ($211.51) a share, an amount Dexia’s board said was acceptable.

The offer works out to a total of 670 million shekels. The two banks will begin negotiations now with the aim of reaching a binding agreement by October 25.

In March, Belgian banking group Dexia SA sold a controlling 58.89 percent stake in its Israeli unit for 350 million shekels to institutional investors.

Dexia shares were up 8.8 percent at 706.8 shekels in afternoon trade while shares in Discount, Israel’s fourth-largest bank, were up 3 percent at 13 shekels.

The acquisition agreement is subject to due diligence and regulatory approval.

Israel’s Anti-Trust Authority in May rejected a planned merger between Mizrahi Tefahot Bank and smaller rival Union Bank of Israel, a decision the two banks are appealing.

Dexia does not work in retail banking but rather in public and municipal financing. ($1 = 3.5866 shekels) (Reporting by Tova Cohen, Editing by Ari Rabinovitch)