Delek Group joins bidding for Isracard

Shareholders of credit card company Isracard were supposed to vote on the offer made by insurance company Menorah Mivtachim to acquire it for NIS 3.1 billion. However, at the last minute, Yitzhak Tshuva’s Delek Group made its own bid, valuing Isracard at NIS 3.36 billion, while Al-Quds Bank also made an offer, with a valuation of between NIS 3.2 and 3.4 billion, for a merger through a share swap. Globes reported that Chuva was eyeing Israkard last June.

Isracard stated that it had received an offer from Al-Quds Bank, as well as from the Delek Group, to buy control of the company. “The offers will be sent for examination by the board of directors along with the offer submitted by Minora,” the company said.

Minorah Mitzvah seeks to acquire Isracard by allocating shares that give it a 31% stake in the company, in a deal that values ​​Isracard at 3.1 billion shekels. Delek Group is offering to buy Isracard shares in a private placement that would give it a 37% stake, at a price that values ​​Isracard at NIS 3.36 billion, 11% higher than Isracard’s closing price yesterday, and 15% higher than the average share price in the past 30 sessions.

Like Menorah Mitzvah and Al-Quds Bank, Delek Group is trying to entice Isracard shareholders with a dividend. Delek Group proposes to distribute dividends worth NIS 1.3 billion to shareholders before implementing the acquisition deal. Delek Group says it is ready to enter into a binding investment agreement similar to the one between Isracard and Menorah Mivtashem “within a few days.” Delek Group believes that there is a high probability of obtaining the necessary regulatory approvals for the transaction.

Al-Quds Bank proposes a merger

Al-Quds Bank made a different offer from that of Delek Group and Menorah Mivtachim. The bank seeks to buy 100% of Isracard shares, at a value ranging between 3.2-3.4 billion shekels. It proposes a share swap, giving Isracard shareholders shares in Al-Quds Bank. Isracard will become a private company that will be integrated into the bank. Isracard Bank shareholders will own 58% of the combined company, but the Cheval family, which holds the controlling stake in the bank, will continue to control it under the regulatory clearance it holds, even if its holding is significantly diluted.

Bank of Jerusalem has a market capitalization of NIS 1.2 billion, just over a third of Isracard’s value (NIS 3 billion). It believes it has a better chance than Menora Mivtashem of obtaining regulatory approval to complete the deal. He confirms that it is a bank whose shares are publicly traded, has a stable controlling core that will continue after the merger, and is supervised by the Bank of Israel. Bank of Jerusalem proposes to distribute a special dividend of NIS 950-1,050 million to Isracard shareholders from Isracard’s cash, after which it will inject an unspecified amount of capital into the company so that it meets the required capital ratios.

Quds Bank claims that the merger with Isracard will generate competition in both the banking and credit card markets, and that this will eventually spread into consumers’ pockets. Yair Kaplan, CEO of Bank of Jerusalem, said, “From our point of view, our detailed offer, which was approved by the Board of Directors of Bank of Jerusalem, represents a better offer than the other offer received by Isracard, and will carry value for its shareholders.”

Published by Globes, Israel Business News – en.globes.co.il – on December 12, 2024.

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