Shortly after selling 4.9% of the shares in The Phoenix Holdings Ltd. (TASE: PHOE1;PHOE5), Delek Group Ltd. (TASE: DLEKG), controlled by Yitzhak Tshuva, is selling 4.9% more of the insurance group, in another swap deal.
Proceeds from the sale, reported today by Delek Group, totaled NIS 256 million, after last week's sales garnered NIS 253 million for the same number of shares.
Delek Group thus sold 9.8% of the shares in Phoenix for a total of NIS 509 million in two swap deals that will enable it to increase the proceeds from the purchasing bank if the price rises, while if the price declines, Delek Group will have to refund some of the proceeds. The deals are similar to those contracted by IDB in Discount Investment Corporation Ltd. (TASE:DISI) and by Clal Insurance Enterprises Holdings Ltd. (TASE: CLIS).
In the second deal reported by Delek Group, it is taking advantage of the fact that the Capital Market, Insurance, and Savings Authority has changed its attitude to the capital requirements from Phoenix from those of a "medium-sized insurance company, in which a minimum controlling core of 40% is required, to those of a "large insurance company," in which the minimum controlling core is a 30% stake.
Delek Group, which last week scaled down its holdings to 41.3%, now has a 36.4% stake, which still leaves it able to sell a controlling interest. Delek Group can continue selling shares and dispose of 6.3% more of the shares in Phoenix, while still retaining the ability to find a strategic buyer for acquiring control in the insurance group.
In any case, the structure of these deals is a those of a swap deal with the banks, so that two years from now (in the first deal) and in 21 months, (in the new deal reported today), Delek Group will settle price with the banks concerning the dividend-adjusted value of Phoenix, so that Delek Group will get more money if the share price rises and less if it falls.
Sources also inform "Globes" that while last week's deal was with Mizrahi Tefahot Bank (TASE:MZTF), today's deal was with Bank Hapoalim (TASE: POLI).
Two months ago, another deal for the sale of Delek Group's entire stake in Phoenix to Chinese-US company Sirius expired. As far as is known, Sirius still owns 4.9% of the shares in Phoenix and is waiting for the next Antitrust Authority director general or Supervisor of Capital Markets in the hope that they will approve the sale, which outgoing Supervisor of Capital Markets Dorit Salinger refused to do.
In any case, Delek Group sold 4.9% of the shares in Phoenix to Sirius a year ago. Delek wants to sell Phoenix because of a business change and its focus on energy business and in order to comply with the Promotion of Competition and Reduction of Concentration Law.
Published by Globes [online], Israel business news - www.globes-online.com - on September 2, 2018
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