Delek Group Ltd. (TASE: DLEKG) reported yesterday that its sale of The Phoenix Holdings Ltd. (TASE: PHOE1;PHOE5) to Chinese-US company Sirius had been called off. An agreement for Delek Group's sale of 52.25% of Phoenix for NIS 2.5 billion was signed in September.
The agreement was in two stages. In the first stage, Sirius immediately bought 4.9% of Phoenix for NIS 208 million. The second stage consisted of the acquisition of Delek Group's remaining shares in Phoenix for NIS 2.3 billion. Sirius announced on November 23 that it would complete the second stage of the agreement and filed a request for a permit from the Capital Markets, Insurance, and Savings Authority, but never received it. Delek Group's management was aware of this problem and therefore included a clause in the agreement stating that if the conditions for completing the agreement were not fulfilled within eight months, the second stage of the agreement for the sale of 47.35% of Phoenix would be "null and void."
Eight months have now passed and Delek Group has accordingly called the deal off, freeing it to find another buyer, or even to sell its shares in Phoenix on the market. The latter option has become more likely because Phoenix's share price has climbed 23% since Delek Group and Sirius signed their agreement, increasing the insurance company's market cap to NIS 4.9 billion, after having been over NIS 5 billion during the period.
It cannot be ruled out that Sirius will now sell its 4.9% stake in Phoenix. In recent years, the former Phoenix controlling shareholder, the Mayer Group, controlled by Jacob Shachar and Israel Kass, took advantage of the rise in Phoenix's share price by selling a large portion of its remaining holdings in company.
Published by Globes [online], Israel business news - www.globes-online.com - on July 2, 2018
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