Phoenix Holdings Purchase on Hold Due to War

Potential buyer Jared Kushner, son-in-law of Donald Trump, cancels visit to Israel due to the Gaza crisis.

Bloomberg

Worried about the war, Jared Kushner, the son-in-law of New York real estate magnate Donald Trump, canceled a series of meetings scheduled in Israel last week to hammer out the details of his planned 1.7-billion-shekel ($497 million) acquisition of insurer Phoenix Holdings.

Kushner and a team of advisers were slated to hold meetings aimed at advancing the Kushner Group acquisition of a controlling 47% stake in the insurer. The agreement was reached two weeks ago, after Kushner reached an agreement with Yitzhak Tshuva’s Delek Group, the holding company that controls Phoenix.

A source close to Phoenix expressed concern that the war in the Gaza Strip could cause the buyers to get cold feet. Kushner and members of his staff expressed serious worries about the situation. The agreement with New York-based Kushner Funding, headed by Kushner, the husband of Trump’s daughter Ivanka, is non-binding.

Nevertheless, Kushner’s attorneys in Israel are continuing to prepare the paperwork for an application to the Finance Ministry’s Commissioner for Capital Market, Insurance and Savings to approve the sale and award the group a license to control the insurer. Sources close to the Phoenix said they expected the meetings to be rescheduled soon.

The sale values the company at 3.62 billion shekels, meaning Kushner is paying a 16% premium over Phoenix’s Tel Aviv Stock Exchange market capitalization at the time of the agreement. The stock lost some ground after the announcement of the deal, but the recovered to almost its previous level. On Sunday, Phoenix shares closed 2.2% lower at 12.52 shekels on the news that Kushner had canceled his visit.

The Kushner Group has interests in real estate, insurance, media and banking. Most prominently, since 2006 the group has owned Observer Media, which publishes the influential weekly newspaper and website The New York Observer. 

The deal includes a 900-million-shekel loan from Delek to the buyers to finance a large part of the deal. In return, Kushner will put up all the shares he will buy as collateral.