Commercial Bank of New York has lost out in its months-long bid to acquire the New York subsidiary of Israel's United Mizrahi Group.
The voting trustees of $300 million-asset United Mizrahi Bank and Trust Co. have agreed to sell the bank instead to Safra National Bank of New York for about $30 million - more than Commercial was willing to offer.
Commercial has been trying to buy the subsidiary since spring.
"All we're talking about is that from our standpoint, we're not going to be acquiring them," Commercial Bank comptroller Donald J. Linton said in a telephone interview.
"We didn't think it was worth more than what we bid on it," he said. "It became too rich for what we assessed would be good for us."
Under the agreement, the $1.5 billion-asset Safra, owned by Joseph and Moise Safra, will also acquire the holding company's interests in its Latin American offices. The transaction is subject to regulatory approval, expected within a few months.
Jacob Berman, president and chief executive of Commercial Bank, declined to disclose his bank's bid, citing confidentiality agreements, but said the Safra bid was "very substantially higher" than Commercial's offer.
The deal by United Mizrahi follows its privatization by the Israeli government.
Rather than file change-of-control documents with U.S. regulators, the company decided to sell the subsidiary, which had struggled because of the New York real estate depression in the late 1980s.
Under a January 1995 voting trust agreement with U.S. regulators, the voting shares of United Mizrahi Bank and Trust were held by two trustees - including William Isaac, chairman of Secura Group. They were authorized to sell the bank.
The $1.1 billion-asset Commercial Bank, which is owned by the Safdie family of South America, had signed a letter of intent with the parent company to buy the subsidiary in May.