Just 24 hours after the cancellation of the sale of Israeli insurance unit Phoenix Holdings to China’s Fosun Group, Delek Group Ltd., led by Yitzhak Tshuva, has announced that it has signed a non-binding memorandum of understanding (MOU) with American AmTrust Financial Services Inc.
Delek said the sale would be for at least a 47.5 percent stake in Phoenix. Israeli media estimated this would total 1.8 billion shekels ($461 million) and that half the money would be paid in cash upon the closing of the deal.
Will you offer us a hand? Every gift, regardless of size, fuels our future.
Your critical contribution enables us to maintain our independence from shareholders or wealthy owners, allowing us to keep up reporting without bias. It means we can continue to make Jewish Business News available to everyone.
You can support us for as little as $1 via PayPal at office@jewishbusinessnews.com.
Thank you.
In its notification to the Tel Aviv Stock Exchange, Delek also said that according to the MOU, in order to buy shares in the Phoenix, the US company will pay an amount equal to the multiple of 87.5% of Phoenix’s equity as of December 31, 2015. Half of the amount will be paid in cash when the deal is completed, and the balance through a promissory note payable within 60 months.
Delek added that although the MOU is non-binding, it is committed to exclusivity in negotiations to sell Phoenix for 30 days.
Delek has had prior relationship with AmTrust. Last September Delek agreed to sell its stake in Texas-based insurer Republic Companies to the New York-based AmTrust. The deal is expected to close in the first half of 2016.
A deal for Phoenix was conditional on reaching a detailed binding agreement within 30 days of the signing of the letter of intent, Delek said.
