Arison Holdings is set to divest a 4.26% stake in Israeli lender Bank Hapoalim for NIS1.425bn ($385m).

Under the arrangement, Arison will sell 57 million shares for NIS25 each to institutional investors.

Bank of America Merrill Lynch and Citi are joint bookrunners for the divestment, reported Reuters. Barak Capital is acting as the selling agent in Israel.

Once the transaction is complete, Arison’s stake in Bank Hapoalim will reduce to 15.75%.

Bank Hapoalim divestment: Background

In September, Shari Arison, the owner of Arison Holdings, revealed plans to divest her controlling stake in the Bank Hapoalim.

The move was announced after the Bank of Israel, the country’s banking regulator, approved her plans to reduce the company’s controlling stake in the bank from 20% to 5%.

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She is reported to have planned the divestment after the bank failed to find a strategic partner for the banking business.

75% of Hapoalim’s shares are traded on Israeli stock exchange, while the remaining 5% is owned by institutional investors.

Arison Holdings owned controlling stake in the lender for nearly 21 years.

Following the divestment of the 4.26% stake, the company will lose its control permit over Bank Hapoalim. It will be replaced with a holding permit.

Accordingly, Arison Holdings will also lose its capacity to nominate board members.

Valued nearly NIS36bn ($10bn), Bank Hapoalim has 250 branches, more than 600 ATMs, 22 business branches and seven regional business centres in Israel.