Israeli insurance and finance company Menora Mivtachim Holdings Ltd. (level: Paved) renewed its efforts to buy a controlling stake in the credit card company. Isracard (TASE: ISCD). Last Thursday, Menora Mivtachim wrote a letter to Isracard Chairman Tamar Yasur and CEO Ran Oz offering to begin negotiations to invest in the credit card company through a share allocation, which would amount to 32% of the company at a premium to the current market price, to be agreed upon in the talks.
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Menora Mivtachim’s latest bid comes after Israel’s Competition Authority thwarted Harrell Insurance, Investments & Financial Services Ltd. (level: Harl) in its attempt to purchase 100% of IsraCard for NIS 3.3 billion.
Menora Mivtachim’s latest offer is quite different from the one it made in early 2023 when it offered to buy 30% of Isracard for NIS 3.5 billion. It can be assumed that Menora Mivtachim’s latest offer will be significantly lower as the credit card company’s market cap currently stands at NIS 2.7 billion – with its share price down 9% over the past year.
Menora Mivtachim, under CEO Michael Kallman, is banking on its ability to convince Isracard shareholders that it can create future value for them. “With the stable controlling core of Menora, it will be possible to continue to develop Isracard’s activities and lead them, with Menora’s support, to significant growth,” Menora wrote.
“Accepting Menorah’s offer will keep Isracard a public company and will allow its shareholders to benefit from the growth and expansion of its activities and the future added value in Isracard’s activities,” the letter said.
The letter indicates that Menora will have no problem financing the deal – which will be worth about NIS 1 billion. The company wrote that it “has the full financial means to make the investment required to purchase a controlling stake in Isracard.” Isracard stressed that the deal could be completed quickly because it believes it will not undergo a comprehensive due diligence process, as Isracard’s reports to the Tel Aviv Stock Exchange provide sufficient data.
This article was published in Globes, Israeli Business News – en.globes.co.il – on September 3, 2024.
© Copyright Globes Publisher Itonut (1983) Ltd., 2024.
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