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The Israel Corporation (TASE: ILCO) is negotiating to buy 33% of the Paz fuel company for $300 million, surmise capital market sources.

The price would be a good one: the energy sector thinks Paz, which is privately held by a consortium headed by Zadik Bino, is worth around $600 million.

Ownership of Paz breaks down to Bino (51%), Bank Leumi (26%), the heirs of Jack Liberman of Australia (19%), CEO Modi Ben Shach (7%) and others.

Just yesterday Paz won a dramatic race to buy the Ashdod refinery from Oil Refineries for NIS 3.5 billion. The main attraction for The Israel Corporation, which is owned by Sami and Idan Ofer, is presumably the refinery, which the money from the company would help Paz pay for.

Following the acquisition of the Ashdod refinery, which is expected to close in two to three months, Paz is expected to announce intentions to float on the stock exchange, which would bring it fresh capital.

The Israel Corporation board is convening today and is expected to approve the deal. The company declined to comment for this report.