Nutrien Ltd. has announced that its wholly-owned subsidiary Potash Corporation of Saskatchewan Inc., which holds 13.8% of Israel Chemicals (TASE: ICL: NYSE: ICL), is selling its entire holding in a private secondary offering, subject to customary closing conditions. The offering is expected to close on January 23, 2018. Nutrien expects to receive approximately $700 million of net proceeds from the sale of the shares.
The share price of Israel Chemicals, controlled by Idan Ofer's Israel Corporation (TASE: ILCO), responded to the announcement with a fall of about 0.9%. In the past two months, the share price has risen about 10%, bringing the company's market cap in Tel Aviv (its shares are also traded in New York) to NIS 19 billion.
At these prices, Potash's holding is worth some NIS 770 million, meaning that it is selling its stake at a substantial discount.
A group of 5-6 large investment institutions, together with two foreign entities, approached Potash with an offer for the shares. The deal was closed at NIS 13.60 per share. It was led by Stephen Levey's Ion Asset Management. The institutions involved are apparently Psagot, The Phoenix Holdings Ltd. (TASE: PHOE1;PHOE5), Clal Insurance Enterprises Holdings Ltd. (TASE: CLIS), Harel Insurance Investments and Financial Services Ltd. (TASE: HARL), Meitav Dash, and Menorah Mivtachim Holdings Ltd. (TASE: MORA).
The reason for the sale is regulatory requirements in China and India after the merger of Potash Corp. and Agrium to form Nutrien. Potash Corp. was required to sell holdings outside Canada and the US in order to obtain approval for the merger.
In 2013, Potash Corp. made moves to acquire Israel Chemicals outright, but withdrew after opposition from then minister of finance Yair Lapid.
Published by Globes [online], Israel business news - www.globes-online.com - on January 16, 2018
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