The share price of Migdal Insurance and Financial Holdings Ltd. (TASE: MGDL) is up 4.7% to NIS 5.34 on news of the sale of the company, which will be closed later today. Shlomo Eliahu, the owner of Eliahu Insurance Ltd. is buying the 69.13% stake of Italy's Assicurazioni Generali SpA (BIT: GASI) in the company. He has reportedly acquired control of Migdal for NIS 4.2 billion, reflecting a company value of NIS 6 billion, a 13% premium on its market cap of NIS 5.4 billion. Migdal is one of Israel's leading financial groups and the country's largest life assurance company
On Monday, Eliahu strongly denied to "Globes" that he was planning to acquire control of Migdal. His spokesman, Rani Rahav, declined to comment on the market assessments today. Migdal has not responded either. It is due to notify the TASE later today, after the deal is closed. The Yigal Arnon & Co. law firm advised Eliahu on the deal.
"It is not news that Generali has wanted to sell Migdal, and was just waiting for the right opportunity. In short, that says it all," a market source told "Globes".
In mid-January, Migdal said that Generali had received an offer for part of the company. At the time, market sources thought that the deal would be made at a premium of 35%. Generali has a clear interest in selling Migdal because of Italy's shaky economic conditions and the need for banks and insurance companies to increase their liquidity.
Bank Leumi (TASE: LUMI) owns 9.79% of Migdal, and Eliahu owns 11% of Bank Leumi, giving him an indirect holding in the insurance company.
The sale of Migdal joins other Israeli insurance companies that are up for sale. Nochi Dankner has been seeking a buyer for Clal Insurance Enterprises Holdings Ltd. (TASE: CLIS), and Yitzhak Tshuva will also have to sell The Phoenix Holdings Ltd. (TASE: PHOE1;PHOE5), if the recommendations of the Committee for Concentration in the Economy are passed. Dankner almost sold Clal Insurance last year to Permira Funds LLC. There have been reports that Psagot Investment House Ltd. has been in talks to acquire either Ayalon Holding Ltd. (TASE: AYAL) or Hachshara Insurance Ltd., and Migdal may acquire Shlomo Insurance Company Ltd. and Bituach Haklai Ltd.
Published by Globes [online], Israel business news - www.globes-online.com - on March 7, 2012
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