Sources inform ''Globes'' that Delek Group Ltd. (TASE: DLEKG), controlled by Yitzhak Tshuva, is seeking a buyer for Republic Companies Group Inc., the US insurer that was acquired two and a half years ago. The asking price is reportedly $300 million.
Delek acquired Republic Companies Group in August 2006 for $290 million, and subsequently injected an additional $28 million into the company. A sale at the current asking price will mean a net capital loss for Delek. Delek also controls Israel Phoenix Assurance Ltd. (TASE: PHOE1;PHOE5). Both insurance companies are held through Delek Capital Ltd.
Delek apparently wants to sell Republic Companies Group in order to focus on its core businesses, and concluded that it would have to inject even more capital into the US insurance company in order to expand its business.
Delek Group said in response, "From time to time, the company receives business proposals relating to its subsidiaries. These proposals are examined in view of Delek Group's long-term strategy."
Sources said that in December 2006, Phoenix declined an offer by Delek to participate in the acquisition of Republic Companies Group on the grounds that there was no synergy between the insurance companies.
Delek Group's share rose 3.1% by mid-afternoon today to NIS 317.80.
Published by Globes [online], Israel business news - www.globes-online.com - on February 17, 2009
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