Clal Insurance. Negotiations terminated

Premira will not acquire Clal Insurance

According to estimates, negotiations halted as IDB believes new three-stage acquisition outline is not feasible on backdrop of concentration committee's recommendations. European fund planned to buy Clal at a $1.6 billion value

Premira Fund's planned acquisition of Clal Insurance will not come to pass.


IDB Holdings was to advise the Stock Exchange on Wednesday as about the termination of negotiations for the sale of the company's controlling stake, probably on the backdrop of the concentration committee's recommendations on separating the economy's real and financial holdings within a four-year time frame.


According to estimates, negotiations came to a halt as IDB believes that the under the deal's new terms which outline a three-phase acquisition is not feasible in light of the recommendations of the concentration committee.


Premira planned to acquire Clal on a value of $1.6 billion in three separate stakes of 10%, 10% and 35%. It should be mentioned that it was IDB that suggested the three-phase acquisition.


IDB and Premira formed no agreements as regards the timeframe for each phase. Additionally, the parties were divided on the exact value of each of Clal's stakes and it appeared that Premira would have the option of withdrawing from each following phase of the deal.


Furthermore, one of the conditions of the agreement stipulated bringing Africa-Israel CEO Izzy Cohen into Clal Insurance because of his previous experience as Migdal Insurance CEO. Cohen recently announced, "I'm staying in Africa."


Negotiations between IDB and Premira have been ongoing for a year and a half and have known many twists and turns. Negotiations were held under various terms which were affected by market conditions and the financial and industrial environment.


Initially, negotiations were for IDB's entire stake in Clal Insurance (55%) at a $2 billion valuation. The value later dropped until the deal fell through Wednesday.


Meanwhile, Premira Fund is slated to sign a final agreement on Wednesday for the acquisition of the controlling stake of Netafim irrigation solutions company.


Calcalist has learned that on Tuesday, Premira and Netafim's partners – Markstone Fund, Tene Fund and the Magal and Yiftah kibbutzim – finalized the details of the agreement, part of which will be in cash and the remainder will be based on Netafim's milestone objectives.


The deal will be based on a real value of $850 million and a ceiling value of $890 million. Premira will hold a 51% stake of Netafim after Magal kibbutz decided to hold on to its 6% stake in the company.


Click here to read this report in Hebrew



פרסום ראשון: 09.21.11, 14:58
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