El Al in talks to buy Diners credit card stake from Alon

El Al  picture: Eyal Yitzhar

Alon wants to sell its Diners shares to pay for the Mega recovery plan.

Will El Al Israel Airlines Ltd. (TASE: ELAL) become a shareholder in the Diners Club credit card company? Sources inform "Globes" that El Al, under CEO David Maimon, is in preliminary talks with Alon Israel Oil Company Ltd. to acquire 49% of Diners. Another possible scenario is the acquisition of the shares by El Al in partnership with Israel Credit Cards Ltd. (ICC-Cal), Alon's partner in Diners, which is currently in advanced negotiations with Alon Israel Oil to buy the shares.

El Al did not respond to the report. Alon Israel Oil said, "The group did not approach any concern on its own initiative to offer its share in Diners. We emphasize that the partners in the Diners have first refusal rights to the shares."

Supermarket chain Mega, an Alon Israel Oil subsidiary, has recently been in financial straits that led to a credit arrangement with its creditors. As part of the recovery plan for Mega, Alon Israel Oil, controlled by Shraga Biran, is due to sell some of its assets, among them its shares in Diners.

The main candidate to buy the shares is ICC-Cal, Alon Israel Oil's partner in Diners, controlled by Israel Discount Bank (TASE: DSCT) with a 51% stake. Discount Bank, managed by CEO Lilach Asher-Topilsky, officially announced last week that ICC-Cal was conducting such negotiations.

As far as is known, the negotiations between Discount Bank and Alon Israel Oil are for the sale of the shares at a price in neighborhoods of NIS 140 million, reflected a NIS 285 million value for Diners.

The possibility of making El Al a shareholder in Diners was suggested by El Al's cooperation with the credit card company in the Fly Card club.

The credit card, designated for El Al frequent flyers, provides a preferable conversion ratio for accumulation of flight points. A year ago, Diners won an El Al tender to issue the card (all the credit card companies issue cards of El Al's prestige clubs), after undertaking to invest considerable sums in it.

The credit card has been very popular, and it is estimated that the number of such cards issued will reach 100,000 within a year.

Published by Globes [online], Israel business news - www.globes-online.com - on August 16, 2015

© Copyright of Globes Publisher Itonut (1983) Ltd. 2015

El Al  picture: Eyal Yitzhar
El Al picture: Eyal Yitzhar
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