Another hurdle in the way of the sale of The Phoenix Holdings Ltd. (TASE: PHOE1;PHOE5) by Delek Group Ltd. (TASE: DLEKG), controlled by Yitzhak Tshuva, to Chinese company Fosun looks about to fall. Commissioner of Capital Markets, Insurance and Savings at the Ministry of Finance Dorit Salinger is tending towards approval of the deal, according to market sources.
In late June, Fosun signed a binding agreement to buy the controlling stake in Phoenix after less than six months of negotiations. Fosun is due to pay NIS 1.8 billion for Delek Group's entire 52.3% stake in Phoenix, which gives the insurance company a valuation of NIS 3.5 billion.
Market sources are sure that Salinger will shortly give her approval for the deal, particularly after Fosun's acquisition of Ironshore and its receipt of regulatory approvals in the US and the UK. Nevertheless, one source said that "the deal may be close to approval, but then again it has been close to approval for months."
Delek Group will not post a gain from the Phoenix deal, and it is close to selling off all its financial holdings, which have turned out not to be a successful investment for it, yielding too low a return. Delek Group had three holdings in financial services companies: Phoenix, US insurance company Republic, and Barak Capital. Delek would almost certainly have been happy not to have invested in the first two.
At any rate, the sale of its Phoenix stake furthers Delek Group's strategy of transforming itself from a diversified holding company to a group focused on energy and hydrocarbon exploration.
Published by Globes [online], Israel business news - www.globes-online.com - on November 30, 2015
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