Business in Brief: Delek Says China’s Fujian Yango in Nonbinding Pact to Buy Insurer Phoenix

Strauss-PepsiCo venture buys Dutch hummus maker; Africa Israel says Russian unit missed principal payment to bank; Tel Aviv indices end higher, led by biomeds; Gazit sells stake in Brazilian mall operator.

Stock prices flash on an electronic screen displaying world clocks at the Tel Aviv Stock Exchange (TASE) in Tel Aviv, Israel, on Thursday, Dec. 11, 2014.
Bloomberg

Delek says China’s Fujian Yango in nonbinding pact to buy insurer Phoenix

Delek Group, the holding company controlled by Yitzhak Tshuva, said Sunday it signed a nonbinding agreement to sell its insurance unit Phoenix Holdings to China’s Fujian Yango Group for at least 1.85 billion shekels ($481 million) in cash.

The deal for Delek’s 52.3% stake in Phoenix is subject to due diligence and regulatory approvals, it said in a statement to the Tel Aviv Stock Exchange.

The agreement marks the third attempt by Delek to divest Phoenix. In March, a nonbinding agreement to sell the insurance company to a U.S. insurer, which industry sources identified as AmTrust Financial Services, was canceled by both sides. Before that, Delek had agreed last year to sell the Phoenix stake to another Chinese company, Fosun International for 1.8 billion shekels but it collapsed after regulators signaled they would not approve the acquisition.

Delek shares ended 1,6% at 760.60 shekels. (Reuters)

Strauss-PepsiCo venture buys Dutch hummus maker

The joint venture between Israel’s Strauss Group and PepsiCo said over the weekend it had acquired Florentin, a Dutch maker of organic hummus, falafel, spreads and pita bread products.

The acquisition is part a global expansion by Sabra, the two companies’ U.S.- based maker of hummus and prepared salads, which will combine its expertise with a Florentin’s “understanding of local trends and culture,” said Shali Shalit-Shoval, Sabra’s CEO.

The two will pay an initial 9 million euros ($10 million) for the company with up to another 1.75 million in performance payments over the next three years.

Florentin products are sold in Western Europe, particularly the Netherlands, Germany and France, and had 2015 sales of approximately 5 million euros ($5.6 million). Florentin was founded by Israeli Benny Moshel, who also operates a small facility in the Israeli town of Carmiel and may lend his expertise in organic foods to help Strauss reverse falling sales of hummus and salads.

Strauss shares closed up 0.6% at 60.86 shekels ($15.81). (Yoram Gabison)

Africa Israel says Russian unit missed principal payment to bank

AFI Development, Africa Israel Investments’ Russian real estate subsidiary, said over the weekend that it failed to make two principal payments totaling $8.1 million to Russia’s VTB Bank due June 30, entitling the bank to call in the loan immediately.

It said that Lev Leviev, controlling shareholder of the financially troubled Africa Israel group, remains in negotiations with VTB on his providing a personal guarantee of $191 million on the loan.  The guarantee is supposed to buy AFI, which has been pounded by the deep recession in Russia, a 10 month-grace period during which VSB would not call in the loan.

AFI said that if no agreement is reached by August 1 it would give the bank three properties – AFIMall City, the Aquamarine III Business Center and Aquamarine Hotel – in exchange for canceling the debt.

Shares of Africa Israel, which is negotiating debt relief with bondholders holding 3.1 billion shekels ($810 million) of debt, rose 8.2% to finish at 1.12 shekels. (Shelly Appelberg)

Tel Aviv indices end higher, led by biomeds

Tel Aviv shares ended sharply higher on Sunday, led by biomed stocks, as Brexit fears receded.

The TA-255 and TA-100 indices both ended about 1.1% higher at 1,412.91 and 1,224.58 points, respectively, on turnover of 580 million shekels ($150 million). Biomed shares were lifted by Opko Health, which rose 4.9% to close at 37.31 shekels after it said it was acquiring Toronto-based Transition Therapeutics for approximately $60 million.

El Al Airlines shares led the TA-100 on a 6.2% rise to 2.72 shekels. Delek Drilling finished 1.4% higher at 13.79 and Avner was up 1.25% at 2.52 after they said the Tamar partners had approved investing $265 million to develop the gas field’s eighth drilling platform. Arco gained 2.6% to 1.03 after saying it was spending $35 million to buy 18 filling stations in the U.S. Midwest. (Shelly Appelberg)

Gazit sells stake in Brazilian mall operator

Gazit Globe, Israel’s largest real estate development company, said on Sunday it sold part of its stake in the Brazilian company BR Malls for $52.6 million and used the proceeds to buy new property in Sao Paulo for $47 million.

Gazit has been selling down its holding in BR and said on Sunday that its stake was now less than 5%, valued at roughly 90 million shekels ($23 million). It reported a 40 million shekel ($10.4 million) from the sale.

“We earned an impressive profit from our investment in BR Malls, and will continue to explore the options for the sale or purchase of additional shares based on market conditions or, alternatively, for direct investment in real estate.” said CEO Rachel Lavine.

She said Top Center Shopping, the property Gazit acquired, contains office building, a parking garage and shopping center, whose retail space may be expanded in line with the company’s focus on malls.

Gazit shares ended 2.2% higher at 37.17 shekels. (Omri Zerachovitz)