The sale of Israel insurance and finance group The Phoenix Holdings (TASE: PHOE) to Abu Dhabi Development Holding Co. (ADQ) has fallen through. The Phoenix notified the Tel Aviv Stock Exchange this morning that the memorandum of understanding that it reported on December 13 last year, whereby US investment funds Centerbridge and Gallatin Point Capital were to have sold 25% of the group to ADQ, had been cancelled “because of the possible regulatory restrictions that would have arisen as a result of the purchase of the controlling core by the consortium.”
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According the The Phoenix’s announcement, the upshot of those restrictions would have been that some members of the consortium would not have been able to carry out further substantial investments in Israel. The company says, however, that the sale of the controlling stake could take place with a new structure. Members of the consortium from Abu Dhabi are still showing interest in becoming the controlling shareholders in The Phoenix.
The sides therefore reported that they were formulating a new agreement whereby the current controlling shareholders would sell part of their shares in The Phoenix, but would retain a holding of at least 30%, fully diluted. That is to say, they will retain control while Abu Dhabi become ordinary shareholders.
Centerbridge and Gallatin bought control of Phoenix in 2019 from Delek Group, controlled by Yitzhak Tshuva. Three years later, it was announced that the two funds would sell most of their stakes to ADQ for NIS 2.3 billion, which would yield them a return of some 150% on their investments. The deal price valued the company at NIS 9.2 billion, slightly less than its market cap at the time. Since then, The Phoenix’s market cap has climbed to NIS 9.8 billion.
Published by Globes, Israel business news – en.globes.co.il – on July 23, 2023.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2023.
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