Chinese company Fosun, which is expecting to receive regulatory approval for control of Israeli insurance company The Phoenix, is seeking an additional discount on the massive deal valued at NIS 1.85 billion sources informed "Globes".
According to market analysts, Fosun wants to reduce the value of the deal, which is in the final stretch and awaiting the approval from the ministry of finance. The move comes after the recent developments in Phoenix, the 8% decrease in value of Israeli insurance companies over the past month, and at the last opportunity to influence the final deal.
The controlling stake in Phoenix is being sold because its holder Yitzhak Tshuva’s Delek Group wants to liquidate its holdings in the insurer as part of a comprehensive strategy to focus its operations on exploration and production of natural gas and oil.
Delek has sold a series of its holdings in the past two years, including American insurer Republic, Delek Europe, most of its holdings in Delek USA, and Barak Capital.
Sources familiar with Delek claimed they had yet to receive a request by Fosun to lower the price, though they would not be surprised if such an overture was made at the last minute. The group said in a statement, "The parties are working to close the deal according to the terms of the sale agreement."
Fosun did not comment.
Meanwhile, the ministry of finance is expected to complete the approval process for the Fosun-Delek deal. The Chinese company has been preparing for the regulatory approval - market analysts believe they have turned to Dr. Moshe Barkat, asking him to return to his role as Phoenix chair, which he left last year.
Barkat would be tapped up to maintain an Israeli presence atop the corporate hierarchy - in response to the ministry of finance’s concern over transferring control of a large institutional body to Chinese ownership. Regardless, Fosun chairman Guo Guangchang will be arriving in Israel next week.
Published by Globes [online], Israel business news - www.globes-online.com - on December 1, 2015
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