Dankner’s IDB Admits Thai Investor Pullout From Clal Deal

Embattled Israeli tycoon Nochi Dankner faces another setback as CP Group backtracks on plan to purchase his stake in Clal Insurance, a transaction which a court ordered to complete before next week.

The IDB Development Corporation announced on Wednesday that the Thai CP Group had withdrawn its plan to purchase the company's stake in Clal Insurance.

However, the company stated in a report filed Wednesday morning with the Tel Aviv Stock Exchange, that another potential suitor from Hong Kong was still interested in pursuing a deal for Clal Insurance.

Following the news of the collapse of the deal, first reported by TheMarker early Wednesday morning, the shares of IDB Development's parent company IDB Holding Corporation dropped more than 2% from their NIS 5.52 closing price on Tuesday.

Shares of Clal Insurance slid to a similar degree from their Tuesday closing price of NIS 65.60 per share. Bond prices for both IDB Development and IDB Holding fell as well.

The decision by CP Group, controlled by Thai billionaire Dhanin Chearavanont, came just a week before Dankner’s court-imposed deadline to sell Clal expires.

Sources who asked not to be identified said that it was made because the CP Group feared they would not be able to get approval by the Finance Ministry's capital markets, insurance and long-term savings commissioner, Oded Sarig, to take control of the company.

The approval would have required a wide-ranging examination of CP's global operations, which include agribusiness and food, retail and distribution, and telecommunications. In addition, it appears CP has reconsidered the valuation for Clal and found it excessive.

Under the agreement announced two weeks ago, Dankner's IDB Development Corporation was supposed to sell to CP, formally known as the Charoen Pokphand Group, a controlling 30% stake in Clal that values the company at NIS 4.6 billion. CP was also supposed to be entitled to an option to buy another 25%.

Hong Kong investor Li Haifeng, who was supposed to join CP in the acquisition as minority partner, appears to be interested notwithstanding and is exploring new potential partners for a deal. In any case, it is doubtful that Dankner will be able to reach a second agreement at the same valuation as he did with CP.

Tel Aviv District Court Judge Ilan Orenstein has given IDB until August 22 to sell at least half its 55% stake in Clal.

Ofer Vaknin