“Globes” has learned that Phoenix insurance group controlling shareholder Yosef (Yossi) Hackmey is planning a far-reaching measure, centered around a merger between Israel Phoenix and its subsidiary Hadar. Under the terms of the merger, as first revealed by “Globes” last week, Phoenix general manager Dr. Itamar Borowitz will resign. He will be replaced by Hadar chairman Bar Kochva Ben-Gera. Phoenix owns 88% of Hadar, with the rest held by the public.
The merger will be part of the consolidation process underway in Israel’s insurance industry, and is intended to save the company millions of shekels in management and other expenditures. The merger is also expected to dilute Shlomo Eliahu’s 38% holding in Israel Phoenix and ease the future sale of the Phoenix group by Hackmey and his sister, whose combined holding of Phoenix’s equity is 58%.
As earlier reported, Hackmey was negotiating to sell control of the Israel Phoenix to Menorah Insurance but the negotiations ended without results. Market sources say that Hackmey also negotiated to sell his share to French insurance giant AXA, whose chairman Claude Bebear met Hackmey during a visit to Israel three weeks ago. Insurance industry sources believe that potential buyers “are not enthusiastic” about Borowitz’s continued management of the company.
Hackmey places great trust in Ben-Gera, based on a long-standing relationship that began when Ben-Gera served as Hadar general manager. The sources also said that tensions between Hackmey and Borowitz were recently heightened over a number of matters, including Phoenix’s poor 2000 financial results, which will be published shortly.
Borowitz is currently abroad and was unavailable for response. Hackmey denied over the weekend that he intends to replace Borowitz. “Globes” approached Ben-Gera, but no response had been received by web-posting. A spokesman for the Israel Phoenix and the general manager’s office confirmed to “Globes” that Hackmey met Bebear, but declined to comment on the content of their talks.
Published by Israel's Business Arena on 18 March 2001