Sources inform ''Globes'' that Shlomo Eliahu is in talks to sell the life insurance portfolio of Eliahu Insurance Company Ltd. to Harel Insurance Investments and Financial Services Ltd. (TASE: HARL) for NIS 350 million. Sources say that Harel is in no hurry to pay such a high a price, and a deal may not be struck at all.
Eliahu must sell Eliahu Insurance's life insurance business in order for him to acquire the 69.13% controlling interest in Migdal Insurance and Financial Holdings Ltd. (TASE: MGDL) from Italy's Assicurazioni Generali SpA (BIT: GASI) for NIS 4 billion. Market sources believe that the regulator will ultimately approve the sale, but only after Eliahu Insurance has sold its life insurance portfolio.
Eliahu's previous attempt to sell Eliahu Insurance's life insurance business to Psagot Investment House Ltd. have been frozen. ,p>Harel said, "Harel Insurance has been approached about the possibility of buying Eliahu Insurance's life insurance portfolio. Other parties in the market have also been contracted with similar offers. However, the approach has not led to any concrete that requires notification."
Eliahu Holdings Ltd. is already an indirect shareholder in Migdal, through its 11% stake in Bank Leumi (TASE: LUMI), which owns 9.79% of Migdal. Eliahu must sell Eliahu Insurance's life insurance business because of the 15% cap on any one company's acquisition in the pension savings market (life insurance, provident funds, and pension funds), as opposed to organic growth. Migdal already exceeds this cap with a 19% market share. The same cap prevents Eliahu Insurance from selling its life insurance portfolio to Clal Insurance Enterprises Holdings Ltd. (TASE: CLIS).
Harel is Israel's fourth largest life insurance company, in terms of life insurance reserves, with a 14.9% market share as of the end of 2011. Eliahu Insurance is the eighth largest company in the market, and is not considered a major player in it.
Published by Globes [online], Israel business news - www.globes-online.com - on July 8, 2012
© Copyright of Globes Publisher Itonut (1983) Ltd. 2012