Israeli insurance and finance firm Menora Mivtachim Holdings Ltd. (TASE: MMHD) has renewed its efforts to buy a controlling core in credit card company Isracard (TASE: ISCD). Last Thursday Menora Mivtachim wrote a letter to Isracard chairperson Tamar Yassur and CEO Ran Oz offering to begin negotiations to invest in the credit card company through a share allocation, which would total 32% of the company at a premium on the current market price, to be agreed in the talks.
Menora Mivtachim's latest bid comes after the Israel Competition Authority thwarted Harel Insurance Investments and Financial Services Ltd. (TASE: HARL) in its bid to buy 100% of Isracard for NIS 3.3 billion.
Menora Mivtachim's latest bid is very different from its bid at the start of 2023 when it offered to buy 30% of Isracard at a company valuation of NIS 3.5 billion. It can be assumed that Menora Mivtachim's latest bid will be considerably lower with the credit card company currently having a market cap of NIS 2.7 billion - with the share price down 9% over the past year.
Menora Mivtachim, under CEO Michael Kalman, is banking on its ability to persuade Isracard's shareholders that it can create future value for them. Menora wrote, "Under the stable controlling core of Menora, it will be possible to continue to develop Isracard's activities and lead it, with the support of Menora, to major growth."
"Acceptance of Menorah's offer will keep Isracard as a public company and will allow its shareholders to benefit from the growth and expansion of its activities and the future extra value in Isracard's activities," the letter stated.
The letter indicates that Menorah would have no problem financing the deal - which would be close to an estimated NIS 1 billion. The company wrote it has, "The full financial means required to carry out the investment to acquire a controlling interest in Isracard." Isracard stressed the deal could be completed quickly since it believed it would not be subject to comprehensive due diligence, with Isracard's reports to the TASE providing sufficient data.
Published by Globes, Israel business news - en.globes.co.il - on September 3, 2024.
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