London-based XIO Fund Said to Be Behind Bid for Israel's Meitav Dash

The offer is reported to be for $370 million, a 60% premium to the investment house’s market value.

Zvi Stepak, left, and Eli Barkat of Meitav Dash.
Eyal Toueg

The London-based investment fund XIO is in talks to buy Israeli investment house Meitav Dash for 1.4 billion shekels ($370 million), sources told TheMarker.

That price reflects a premium of more than 60% on Meitav Dash’s market value even after reports on the offer’s terms began circulating Thursday. Meitav Dash shares ended 7.7% higher at 13.78 shekels, putting its market capitalization at 862 million shekels.

Meitav Dash said Thursday it was in talks with an international investment fund but declined to name it or detail any terms. “After reviewing the proposal, the company’s board decided to initiate discussions with the aim of examining the offer and its feasibility,” it said in a statement to the Tel Aviv Stock Exchange.

Meitav Dash said it had named three directors to conduct talks but warned that terms had not yet been reached and that XIO would have to win regulatory approval before any sale could be completed.

Meitav Dash manages more than 122 billion shekels in assets and is one of two firms that have chosen to manage the new government-sponsored default pension fund for Israelis who have no other retirement savings, which adds considerably to its business. Meitav Dash is controlled by the BRM investment fund and Zvi Stepak, its founder, who each have a 28.5% stake.

If completed, the sale could have implications for the sale of Meitav Dash’s bigger rival, Psagot, by raising the value benchmark for Israeli financial service companies. Psagot, which manages some 210 billion shekels in assets, has been for sale for some time by British buyout fund Apax Partners.

XIO, which is backed by Chinese and European investors, is not new to Israel. It bought Israeli medical-electronics maker Lumenis in 2015 and was one of the bidders in the abortive sale of Clal Insurance by the IDB group.