Israeli-held Bank Pozitif bids $42 mln for Adabank

Its bid of $42 million was less than half of an estimated price of $90 million set by Turkey's TMSF savings deposit insurance fund ahead of the auction.

The tender was held against a background of diplomatic tensions between Turkey and Israel, which had triggered concerns about the future of economic ties between the two countries.

Turkey, once a close ally of Israel, has become a sharp critic since nine pro-Palestinian Turkish activists were killed in an Israeli raid on a Gaza-bound aid ship in May.

Bank Hapoalim, Israel's second-largest bank, bought a 57.6 percent stake in Turkey's Bank Pozitif in 2006 and raised its stake to 65 percent in 2008.

A fund official said at the tender meeting that the bid would be presented to the fund's board and that if it decided to proceed with sale negotiations, they would be held on Nov. 26.

Previous attempts to sell off small lender Adabank were unsuccessful. The bank was seized along with other assets held by Turkey's Uzan group in 2003.

Three banks had sought prequalification for the tender, Turkish media reported.