Delek Group Ltd. (TASE: DLEKG) unit Israel Phoenix Assurance Ltd. (TASE: PHOE1;PHOE5) and investment house Excellence Investments Ltd. (TASE: EXCE) founders Roni Biram and Gil Deutsch are in advanced talks on a compromise on a disputed deal for Phoenix to buy 41% of Excellence from Biram and Deutsch.
According to sources close to the negotiations, a compromise is expected to be worked out in the coming days. Sources inform "Globes" that the deal will include spreading Phoenix's payment to Biram and Deutsch over 2-5 years.
It also appears that the two Excellence founders will receive about at least NIS 650-700 million. Since the debt will be spread over several years, a mechanism will be included to allow them to enjoy any upside if Excellence's profits grow significantly. In addition, the sides discussed allowing part of the payment in shares of Phoenix.
As far as is known, the sides have not yet reached agreement, and are continuing to talk in an attempt to resolve the issue before the case reaches court in September.
Deutsch, Biram, and Phoenix had no comment, and Delek did not respond.
The sides submitted an agreed-upon notice to the court, notifying it of the postponement by one week of Phoenix's statement of defense in response to claims by Biram and Deutsch. The move implies that the sides feel that they will succeed in reaching an agreement within that time and that the statement of defense will not have to be filed.
It was also reported today that Biram and Deutsch revised the amount of their suit against Phoenix upward to NIS 814 million, from NIS 752 million, in light of the good financial results that their investment house posted for the first quarter.
In March, the Excellence founders sued Phoenix, following Phoenix's cancellation of its acquisition agreement for Excellence Investments. Biram and Deutsch claimed that their "Put" option, and Phoenix's agreement to acquire their shares in Excellence, was clear and unequivocal and they have the right to sell the shares to the Phoenix. Phoenix and Delek claimed the deal was cancelled.
Yitzhak Tshuva controls Delek Group, and is the controlling shareholder of Phoenix.
Biram and Deutsch together own about 40.9% of Excellence, and Phoenix owns 40%. Althshuler Shaham owns about 9.7%, and the public owns 9.4%.
Published by Globes [online], Israel business news - www.globes-online.com - on May 25, 2009
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