Following yesterday's signing of an agreement for the sale of a controlling interest in The Phoenix Holdings Ltd. (TASE: PHOE1;PHOE5) to Chinese investment company Fosun Group, the procedure for the sale of another major Israeli insurance company - Clal Insurance Enterprises Holdings Ltd. (TASE: CLIS) - is continuing. Sources inform "Globes" that two weeks after an information room for the sale was opened, seven foreign entities had already expressed initial interest, entered the room, and signed a confidentiality agreement. Unsurprisingly, these consisted mostly of private equity funds and entities from China.
The next stage in the proceeding for the sale of the shares in the Clal Insurance controlling interest, currently owned by Eduardo Elsztain's IDB Development Corporation Ltd. (TASE:IDBD), will take place in mid-July, when the parties still interested in the acquisition submit non-binding bids. This will indicate how much interest the sale of Clal Insurance is really arousing.
As of now, the entities that have expressed interest in Clal Insurance are private investment fund CVC, founded in 1981, which has raised over $71 billion since then, and currently manages over $45 billion; US private investment fund Warburg Pincus LLC, which has been operating since 1996, and has invested over $45 billion in 675 companies; Chinese-European private equity fund XIO, which recently acquired Israeli company Lumenis Ltd. (Nasdaq: LMNS); giant Chinese insurance company China Life; European fund Cheyne Capital, which commenced operations in 2000; Tennenbaum Capital Partners (TCP), founded in 1999, which has invested over $14 billion in 380 portfolio companies; and Chinese group JT Capital, headed by Li Haifeng, which has already been in advanced negotiations to acquire Clal Insurance, and even submitted a request for approval from the Supervisor of the Capital Markets, Insurance, and Savings, who as far as is known was inclined not to approve Haifeng's request. JT Capital has combined forces with a Chinese insurance company this time.
Investment bankers from Aon Benfield and Citigroup are leading the sale, with the deadline for submitting non-binding bids being mid-July.
Sources close to the sale of Clal Insurance are expressing optimism, in view of the Phoenix deal, in which a binding agreement was signed. The revised Phoenix deal, however, which includes a 9% discount on the original value agreed by Fosun and the Delek Group Ltd. (TASE: DLEKG), the seller, is also likely to indicate that the value of a major insurance group in Israel is less than the shareholders' equity per its books.
Published by Globes [online], Israel business news - www.globes-online.com - on June 22, 2015
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