Direct Insurance - Financial Investments Ltd. (TASE: DIFI) wants to delist subsidiary IDI Israel Direct Insurance Ltd. (TASE: IDI) from trading, at an investment of NIS 116 million. Last night, Direct Insurance made an offer to purchase IDI at NIS 6.50 per share, 8.3% above its market price, reflecting a company value of NIS 500 million for IDI. The public owns 23.2% of IDI.
The offer to purchase is valid through April 5. Market sources believe that the offer to purchase will fail, because of the low premium Direct Insurance is offering.
Direct Insurance reportedly wants to delist IDI in order to prepare for the new market conditions created by the Bachar capital market reforms. Another reason is a measure announced in October 2005, under which Direct Insurance plans to offer its customers financial services through private companies, similar to a measure Israel Phoenix Assurance Ltd. (TASE: PHOE1;PHOE5) is now trying to implement. Israel Phoenix plans to become a holding company that will control two private companies, one for insurance, and the other a financial company.
Direct Insurance wants to become a large financial group that will offer its customers a fill range of products, including non-life, life and health insurance, pension, provident and mutual funds, and portfolio management. The company is restructuring to carry out this vision.
Published by Globes [online], Israel business news - www.globes.co.il - on March 16, 2006
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