Israel's IBD Group Gets Offer for Its Clal Insurance Stake

Holding company says unnamed buyer values insurer at 4.7 billion shekels

Eyal Toueg

IDB Development Corp.said Thursday that a foreign group had offered to buy its 50% stake in Clal Insurance.

IDB must sell its stake under Israeli rules barring holding companies from owning both financial and nonfinancial businesses. Two earlier attempts to sell one of Israel’s biggest insurers failed.

“The company is studying the offer,” IDB said in a statement, adding there was no certainty the offer will lead to negotiations or end in a deal. IDB did not identify the potential buyer or provide further details.

The offer is based on a valuation for Clal Insurance of 4.7 billion shekels ($1.3 billion), as recorded in its 2016 financial statement, subject to due diligence, IDB said in a statement to the Tel Aviv Stock Exchange.

Shares of Clal ended 4.7% higher at 58.40 shekels, giving it a market capitalization of 3.1 billion shekels.

IDB’s controlling shareholder, Argentine businessman Eduardo Elsztain, said in September he had hired JPMorgan to find a buyer for Clal Insurance, after two failed attempts by IDB to sell its stake to Chinese investors.

The government has been reluctant to approve the purchase of key financial assets such as insurers by Chinese investors, fretting over pension cash.

Israel’s Delek Group has also run into difficulties selling its controlling stake in insurer Phoenix Holdings.

In June Delek said its planned sale to China’s Fujian Yango Group was called off by both sides after it failed to secure regulatory approval.