Israel's biggest insurance and finance company The Phoenix Holdings (TASE: PHOE) has notified the Tel Aviv Stock Exchange (TASE) that its controlling shareholders Centerbridge Partners and Gallatin Point (31.45%) are selling most of their stake. Centerbridge and Gallatin are selling 21.5% of Phoenix for NIS 2 billion to other investors at NIS 37.5 per share, for a handsome return on their investment.
Phoenix Group's share price rose 6.7% yesterday after news of the deal was leaked including that Jared Kushnir's Affinity Partners and Yitzhak Tshuva were among the investors. Sources have informed "Globes" that Lazard investment bank is buying an estimated 2%-3% in Phoenix, and Briarwood Chase Capital Management will hold 1.55% and US Jewish businessman Henry Sweica, the founder of Highbridge Capital, who resigned from the board of Columbia Business School over the university's inadequate response to antisemitism is also buying several percent. Together these three investors will hold a 6.5% stake in the Israeli insurance company.
"Saudi money"
It was reported yesterday that among the buyers is Affinity Partners, led by Jared Kushner, the son in law of former US President Donald Trump, which is buying a 4.95% stake and an option for a further 4.95%, if approval is received from the Israel Securities Authority to hold more than 5%. But as much of Affinity's money is from Saudi Arabia, there are concerns that approval may not be forthcoming.
Also expected to return to the Phoenix is former controlling shareholder Yitzhak Tshuva through his holdings in Delek Group (TASE: DLEKG). Tshuva is expected to receive a 4.99% stake by buying shares for NIS 220 million and receiving the rest of the stake in repayment for a NIS 250 million loan.
After all the deal are completed, Centerbridge and Gallatin, which invested in the Phoenix in 2019, will be left with a 10% stake. Jefferies acted as sole global coordinator, bookrunner and financial advisor to Centerbridge and Gallatin Point on the transaction.
Ben Langworthy (Centerbridge) and Lee Sachs (Gallatin) said, "The management team and employees of the Phoenix are among the best in the industry. We have been proud to work alongside them as they transformed Phoenix into one of the nation’s leading financial institutions. We are excited that these transactions will further diversify the shareholder base of Phoenix. These transactions represent a significant vote of confidence in Phoenix and Israel, and the company’s excellent work over the past several years. We look forward to continuing to support the management team as they lead Phoenix to even greater heights."
Jared Kushner (Affinity) said, "We are excited to become significant shareholders in Phoenix. Affinity is long-term bullish on Israel because it is one of the fastest growing countries in the OECD, both in terms of population and GDP growth. We look forward to working closely with the company as it continues its journey toward becoming a globally recognized financial services provider."
Phoenix CEO Eyal Ben Simon and chairman Benny Gabbay said, "Today signifies a significant milestone for Phoenix. Alongside Centerbridge and Gallatin, we have laid the strategic groundwork that has shaped Phoenix into a leading financial group in Israel, attracting interest from top international investors. We look forward to continuing to develop and grow the company, bringing it to new heights for the benefit of all our shareholders."
Published by Globes, Israel business news - en.globes.co.il - on July 16, 2024.
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