Israel Land Development Company (Nasdaq: ILDCY; TASE: ILDC), controlled by the Nimrodi family, has completed its departure from the insurance industry, selling its 57.5% holding in Israeli Credit Insurance Company Ltd. (ICIC) (TASE:BSSC) in equal shares to Harel Insurance Investments Ltd. (TASE: HARL) and Bituah Haklai-Central Cooperative Society Ltd. The sale was made at a company value of NIS113.3 million for Israeli Credit Insurance, 24.7% above its market cap of NIS 90.8 million.
Under the sale contract, Bituah Haklai acquired ICIC from Israel Land Development, and then signed an agreement in principle with Harel to participate in the deal. Bituah Haklai has a grace period to close the deal by the end of August. Israel Land Development expects to make a gross capital gain of NIS 27 million on the NIS 65.2 million sale.
Bituah Haklai and Harel are now negotiating with a leading international insurance company to join the deal, in order to create a counterweight to ICIC’s main rival, the partnership of Clal Credit Insurance Ltd. and Atradius Credit Insurance NV. Harel Insurance CEO Moti Rosen said the company was seeking a foreign partner in the deal.
Bituah Haklai managing director Eyal Levite said, “Our goal is to expand our activities, and we’re active in every sector for this purpose. We see additional financial opportunities in the credit insurance sector, including the possibility of extending credit. Bituah Haklai is constantly examining additional acquisitions in the financial and insurance sectors, although it’s premature to report them.” He added that Bituah Haklai and Harel wanted to partner with a “serious” international insurance company.
At the end of yesterday’s pricing for ICIC, Golden Point Ltd., owned by Avihai Stolero, and which also bid for ICIC, won the right to sell its 9.1% stake in ICIC to Harel and Bituah Haklai at the same company value. The National Workers Organization (Histadrut HaOvdim HaLeumit), which owns 9% of ICIC, is also expected to sell its stake to the buyers’ group, which is then expected to make an offer to purchase for the company’s remaining shares.
ICIC’s other shareholders are Sinai Insurance Holdings Ltd. (5.2%), controlled by the Weinstock family, which also controls Shomera Insurance Co. Ltd., and the public (19.2%).
Regarding ICIC managing director David Milgrom, Levite said, “We want everyone at ICIC to keep their jobs.” Market sources, however, do not think that Milgrom will stay on in his post, which he has held since April 2003.
ICIC chairman Ron Weissberg said, “Israel Land Development’s general strategy is to leave the insurance sector. We’re close to completing this goal. We got good prices for the two deals, ICIC and ILD Insurance Holdings Ltd. (TASE:ILDH).”
When asked if Israel Land Developed got a higher price for ICIC than planned, Weissberg said, “The price we got for ICIC was definitely flattering for Israel Land Development.”
Published by Globes [online], Israel business news - www.globes.co.il - on May 29, 2006
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