Fosun's $460 Million Bid for Israeli Insurance Company Endsby
Fosun International Ltd.’s $460 million deal to buy Delek Group Ltd.’s insurance unit has been terminated, a setback for Israel’s largest energy company as it seeks to focus on its core business.
The Chinese and Israeli holding companies canceled the sale of the controlling stake in Phoenix Holdings Ltd., as all the preconditions stipulated in the agreement were still not met, according to a Tel Aviv bourse filing late Tuesday. Delek is exploring other options to sell its holdings, it said.
The end of the accord is a blow to Delek’s strategy of dispensing businesses unrelated to developing the natural gas discovered off Israel’s coast. Israel passed a law in December 2013 that prohibits companies from owning financial services corporations as well as industrial businesses. Delek had agreed in June to sell its 52 percent stake in Phoenix to Fosun, after a previous deal with Kushner Funding LLC fell through.
“Delek really wanted to get this done but it didn’t happen,” said Noam Pincu, an analyst at Psagot Investment House Ltd., one of Israel’s biggest money managers. “Delek has another four years under the concentration law to sell and it’s not in financial straits at the moment, so it’s not under pressure to sell right now. But it won’t be an easy process because there aren’t too many buyers.”
Delek shares slipped 3.1 percent to 622 shekels, the lowest in three weeks. Phoenix dropped 1.5 percent to 8.361 shekels, the lowest in nearly a week. The benchmark TA-25 Index rose 1.7 percent, the most since November.