Against the background of the IDB bondholders attempt to take over the group, IDB Development announced on Friday that it had received an offer to buy 27.5% of Clal Insurance Enterprises Holdings Ltd. (TASE: CLIS) (half of IDB Development's stake in the company) from a large international fund. IDB Development values Clal Insurance at NIS 4.5 billion.
The fund's letter of intent states that it is also interested in receiving first right of refusal on the rest of IDB Development's stake. It also states that the fund is aware of the valuation placed by IDB Development on the company, and that it seeks to enter into serious negotiations on a deal.
In the past, Nochi Dankner, who controls IDB Development through holding company IDB Holding, rejected an offer from European private equity firm Permira to buy IDB Development's entire stake in Clal Insurance for NIS 2 billion.
The market value of IDB Development's stake in Clal Insurance is NIS 1.9 billion, after a 46% rise in the insurance company's share price in the past year.
The sale of Clal Insurance is the most significant deal that the IDB group has been trying to make in order to inject cash to meet its bond and bank debt. For six months, Dankner has worked on a deal whereby IDB Development's stake would be sold to group company Koor Industries Ltd. (TASE:KOR), and thereby release Koor's NIS 1.75 billion cash to the troubled companies higher up the pyramid.
Published by Globes [online], Israel business news - www.globes-online.com - on May 26, 2013
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