Four groups, either Chinese or whose source of funds is in China, have submitted non-binding bids for the acquisition of a controlling interest in Clal Insurance Enterprises Holdings Ltd. (TASE: CLIS) from IDB Development Corporation Ltd. (TASE:IDBD), controlled by Eduardo Elsztain, according to capital market sources. IDB Development, which owns 55% of the shares in Israel's third largest insurance group, reported today that yesterday, the deadline for non-binding bids for the acquisition of the shares set after a number of postponements, "a number of indicative and non-binding bids for the acquisition of a controlling interest in Clal Insurance" had been submitted, and "The company and its board of directors will consider the bids submitted."
It is believed that these bids came from Tianan Insurance and JT Capital, headed by businessman Li Haifeng; XIO, which operates through private investments funds; holding company Macrolink Group; and another company that has hitherto made fewer inquiries than others - Minsheng Insurance. As far as is known, the first three have conducted thorough checks, and have made frequent visits to the offices of Clal Insurance.
As of now, the price levels of the bids are unknown, but market sources believe that the bids are higher than Clal Insurance's capital, and may even be in the vicinity of 1.2 times its capital.
As of now, there is no certainty which of the bids will materialize into an actual deal. IDB Development must sign a binding agreement with a buyer by the end of the year, and the buyer, if there is one, must obtain approval from Israel Supervisor of Capital Markets, Insurance, and Savings Dorit Salinger by mid-2016. If the deal is not completed according to these timetables, Salinger is likely to instruct Moshe Tery, the trustee for the controlling shares on her behalf, to sell the controlling interest Clal Insurance on the market.
Retaining the current management team is planned
It is believed that most of the Chinese concerns interested in Clal Insurance have already made it clear that they intend to maintain management stability in the company by retaining its leading team - chairman Danny Naveh, and CEO Izzy Cohen, who has made many changes in the company since joining it - in order to maintain the company's continuity and progress.
The first group competing for Clal Insurance is composed of Chinese insurance company Tianan (an 85% stake in the group) and Haifeng (a 15% stake). Tianan chairman Hong Bo said yesterday, "We're interested in acquiring Clal Insurance in a strategic deal and long-term holding." The second, XIO, which recently acquired Israeli company Lumenis Ltd. (Nasdaq: LMNS), is a Chinese investment fund led by two Europeans. The third, Macrolink, is an investment company with 80 subsidiaries rated in 52nd place among the 500 leading Chinese companies.
It is believed likely that if other concerns wish to compete for the acquisition of a controlling interest in Clal Insurance, Tery and the team leading the sale will allow additional bids. Investment banks Aon Benfield and Citigroup are leading the sale procedure.
Published by Globes [online], Israel business news - www.globes-online.com - on August 19, 2015
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