The Hackmey group has notified the Tel Aviv Stock Exchange (TASE) that it has sold control of Israel Phoenix Assurance to businessmen Jacob Shachar and Israel Kass for $311.9 million. The sale follows lengthy and troubled negotiations.
Hackmey will transfer 57.65% of Israel Phoenix's equity and 58.79% of voting rights in the company to Mayer's Cars and Trucks, owned by Israel Kass (50%), Nili Shachar (33%) and her husband Jacob Shachar (17%).
The deal will probably be closed on May 26.
The market value of Israel Phoenix on the TASE was $366.7 million on Monday. the deal was closed at a value of $541 million for the company, reflecting a 47.5% premium. Israel Phoenix jumped 13% in trading today.
Sources close the deal told “Globes” that the final price was close to the price during the negotiations, subject to adjustments. This apparently refers to changes in the exchange rate, the rise of the CPI, and the value of Israel Phoenix as shown in its latest financial reports.
Shlomo Eliahu, who owns 38% of Israel Phoenix, was not a party to the deal, due to a disagreement over the price. Eliahu was asking for $205 million, based on the same market price of the original deal. So far as is known, Kass and Shachar offered $170 million.
Eliahu attorney, Adv. Ram Caspi said today that he has been authorized to sell Eliahu’s stake for $188 million. He was speaking at a Tel Aviv District Court hearing on the planned merger between Israel Phoenix and Hadar Insurance.
The agreement for the sale of control of Israel Phoenix is subject to the approval of the Second Broadcasting Authority, because Israel Phoenix owns 13% of Channel 10 franchisee, Israel 10. The Maccabi Haifa sports club, owned by Jacob Shachar owns the cable Sports Channel together with YES satellite broadcaster. Mayer Cars and Trucks does not believe the cross-ownership will be a problem.
With the signing of this deal, the Hackmey family is leaving the insurance business after over 50 years. The family patriarch, the late David Hackmey, founded Israel Phoenix in 1949, and was a leading industry figure for years.
Israel Phoenix posted NIS 3.4 billion in revenue from insurance premiums and commissions in January-September 2001. The company held 13% of the market. It is scheduled to shortly move to its new offices in Givatayim.
Israel Phoenix also owns 88% of Hadar Insurance, as well as the Atara investment company and British insurance company City Fire, which is losing money and up for sale.
Kass and Shachar are among Israel’s largest vehicle importers, including Honda and Volvo cars and trucks. They have no previous experience in the insurance industry. Israel Phoenix CEO Bar Kochva Ben-Gera is close to Shachar, and will continue in his post, as he has the trust of the new owners.
Published by Israel's Business Arena on 27 February 2002