After the failure of the negotiations on the sale of The Phoenix Holdings Ltd. (TASE: PHOE1;PHOE5) to the Kushner family of the US, Delek Group Ltd. (TASE: DLEKG), controlled by Yitzhak Tshuva, notified the Tel Aviv Stock Exchange today that it had signed a non-binding memorandum of understanding for the sale of control in the insurance company to a listed foreign company with international activity in insurance. It is believed that the company in question is Chinese private equity firm Fosun Capital, which in the past expressed interest in acquiring Clal Insurance Enterprises Holdings Ltd. (TASE: CLIS).
The value of the putative deal was calculated according to Phoenix’s shareholders’ equity at the end of the third quarter of 2014, which was $253 million, plus interest. The consideration that Delek Group is expected to receive is up to $481 million, depending on the size of the holding eventually sold (42-52.3%). The consideration will be paid in cash when the deal is completed.
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The Chinese firm, which manages $10 billion, is a non state-owned investment company registered in Hong Kong. It has insurance holdings outside China. Its name was recently linked to Tnuva Food Industries Ltd., as a possible buyer of Meir Shamir’s holding (21%, worth some $493 million).
The current MOU is another link in a series of sales of holdings by the group, which has declared its intention of focusing on its energy interests. Within the past year it has sold its holdings in Roadchef for $227.8 million, in Delek Europe for $430 million, and in Barak Capital and insurance company Republic for a total of $126.5 million.
Delek Group CEO Asi Bartfeld said, “The MOU we have signed is in accordance with the group’s strategy of focusing on energy, and the deal that will be put together will increase the company’s cash balances by about $506 million. This deal is a further step in a series of successful sales that the group has carried out since early 2013 and that have boosted its cash by $1.65 billion.”
Published by Globes [online], Israel business news – www.globes-online.com
