Israel's Supervisor of Capital Markets, Insurance, and Savings Dorit Salinger is not expected to approve Delek Group Ltd.'s (TASE: DLEKG) the sale of a controlling stake in Israel insurance and financial group The Phoenix Holdings Ltd. (TASE: PHOE1;PHOE5) to China's Fosun Group, market sources believe.
For the past few months both Fosun and Delek have been entitled to cancel the deal without any penalty, however, talks have continued, while maintaining exclusivity of negotiations. The prospective Chinese buyers have also been talking with Israeli Ministry of Finance officials in attempts to persuade them to approve the deal.
As far as is known, both Delek and Fosun have officially been told by the Ministry of finance that no decision has yet been reached despite the many months that have passed since the Chinese group first applied for approval. Fosun's chances were not helped by the recent investigation by the Chinese authorities into its chairman Guo Guangchang. Fosun has depicted the situation as if Guangchang was helping the authorities with their enquiries rather than being investigated himself.
The Ministry of Finance wants to clarify this issue which is weighing on any approval of the deal. As no such official clarification is expected, the Delek-Fosun deal is likely to slowly fade away until both sides understand that Salinger will not be granting any approval.
Published by Globes [online], Israel business news - www.globes-online.com - on January 18, 2016
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