Is the second largest insurance company in Israel about to change hands? Sources inform "Globes" that contacts between IDB Holding Corp. Ltd. (TASE:IDBH), controlled by Nochi Dankner, and European private equity fund Permira, for the sale of Clal Insurance Enterprises Holdings Ltd. (TASE: CLIS), are at an advanced stage. Understandings have already been reached around a price of about $1.9 billion, and Permira plans to start due diligence investigations at the company. Meanwhile, Apax Partners, managed by Zehavit Cohen, has halted its enquiries concerning the acquisition of Clal Insurance
A source close to IDB, who did not want to be indentified because of the sensitivity of the matter, told "Globes" that the negotiations were serious. "Nochi really wants to sell, and if it's a good deal - he'll do it," the source said. A spokesperson for IDB said in response that "beyond the announcement to the stock exchange we published in the past - we have no comment."
At a meeting two weeks ago between IDB and representatives of Permira, attended by Dankner and IDB CEO Haim Gavrieli, the two sides reportedly reached an understanding that allowed them to make progress. At the meeting, Permira asked for exclusivity, but IDB refused. However, after the withdrawal of Apax, there is now no other serious entity competing to buy Clal Insurance. The investment bank brokering the deal is Goldman Sachs, hired a year ago by IDB.to promote the sale of Clal Insurance.
Clal Insurance is currently traded at a market cap of about $1.5 billion dollars (NIS 5.5 billion).The company manages pension funds of approximately NIS 84 billion, and holds 16% of the long-term savings market (life insurance, provident funds, and pension funds) in Israel. The company is headed Shai Talmon. Its annual premiums amount to about NIS 10 billion.
IDB owns 55% of Clal Insurance, so a deal would be worth some $1.04 billion to Dankner.
Published by Globes [online], Israel business news - www.globes-online.com - on January 26, 2011
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