Sources inform ''Globes'' that a large European insurance company is bidding for Clal Insurance Enterprises Holdings Ltd. (TASE: CLIS). The company has hired an investment bank to advise it on the matter, and is holding negotiations at the "decision-making level" with executives of Clal Insurance's controlling shareholder, IDB Holding Corp. Ltd. (TASE:IDBH), controlled by chairman Nochi Dankner.
The European insurance company has global operations and considers Clal Insurance as a strategic investment. A price tag could therefore reach $2.1 billion, compared with the $1.9 billion company value in the talks between IDB and Permira Funds LLC. Moreover, the European insurance company would not need financing to acquire Clal Insurance, and could purchase the company from independent resources.
IDB declined to comment on the report.
The European insurance company has visited IDB's information room for Clal Insurance and met with company executives. Although it is not as far along in its review as Permira, it is not far behind. The sources said today that, last week, that the European company passed a major hurdle in its internal decision-making process, and that it will likely complete its review of Clal Insurance within a few weeks, and then make an offer for the company.
Since the potential buyer is supervised by the EU regulators, IDB expects no problems obtaining approval by the Supervisor of Capital Markets, Insurance and Savings Prof. Oded Sarig for a deal, in contrast to a sale to Permira, which, as a private equity fund, would have to undergo a prolonged regulatory approval process.
IDB has rejected Permira's requests for negotiations exclusivity.
Published by Globes [online], Israel business news - www.globes-online.com - on March 27, 2011
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