China's JT Capital Fund pte Ltd. has asked IDB Holding Corp. Ltd. (TASE:IDBH) for an extension of the agreement to acquire Clal Insurance Enterprises Holdings Ltd. (TASE: CLIS) until May 31, 2014, because of delays in obtaining a control permit from the Ministry of Finance and the pressing timetable, partly due to the upcoming Passover holiday. JT Capital is due to acquire the controlling interest in Clal Insurance from IDB Development for NIS 1.5 billion, at a company value of NIS 4.6 billion.
The agreement was signed with IDB in the summer of 2013, when it was still controlled by Nochi Danker. IDB Development owns 55% of Clal Insurance. "IDB Development's board of directors will convene to discuss the request," says the company, and market sources believe that it will probably agree to the extension.
In the request for an extension, JT Capital revealed that there has been progress in the very protracted approval process for the acquisition, which has lasted far longer than the parties initially expected. It says, "We have obtained approval in principle by the Supervisor of the Capital Markets, Insurance, and Savings with regard to the structure of the buyer of Clal Insurance, after the shareholders of JT Capital's indirect parent company agreed to inject an additional investment of $270 million."
This removes a major obstacle in obtaining Insurance Supervisor Dorit Salinger's approval. However, JT Capital realizes that she will need more time to complete the procedures for granting a control permit.
Published by Globes [online], Israel business news - www.globes-online.com - on April 8, 2014
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