The shareholders in credit card company Isracard were meant to vote on the bid by insurance company Menorah Mivtachim to take it over at a valuation of NIS 3.1 billion. At the last minute, however, Yitzhak Tshuva’s Delek Group has made a bid of its own, valuing Isracard at NIS 3.36 billion, while Bank of Jerusalem has also submitted a bid, at a valuation of NIS 3.2-3.4 billion, for a merger through a share swap. "Globes" reported that Tshuva was eyeing Isracard last June.
Isracard stated that it had received an offer from Bank of Jerusalem, and also from Delek Group, to buy control of the company. "The offers will be sent for examination by the board of directors, together with the offer by Menorah," the company said.
Menorah Mivtachim seeks to take over Isracard through an allocation of shares that will give it a 31% stake in the company, in a deal that values Isracard at NIS 3.1 billion. Delek Group is offering to buy Isracard shares in a private placement that will 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 Mivtachim and Bank of Jerusalem, Delek Group is trying to tempt Isracard’s shareholders with a dividend distribution. Delek Group proposes a dividend of NIS 1.3 billion to the shareholders before execution of the takeover deal. Delek Group says that it is prepared to enter into a binding investment agreement identical to the one that exists between Isracard and Menorah Mivtachim "within a few days." Delek Group believes that there is a high probability that it will receive the necessary regulatory approvals for the deal.
Bank of Jerusalem proposes merger
Bank of Jerusalem has made an offer different from those of Delek Group and Menorah Mivtachim. The bank seeks to buy 100% of the shares in Isracard, at a valuation of NIS 3.2-3.4 billion. It proposes a share swap, giving Isracard shareholders shares in Bank of Jerusalem. Isracard will become a private company that will be merged into the bank. The Isracard shareholders will hold 58% of the merged company, but the Shoval family, which holds the controlling interest in the bank, will continue to control it under the regulatory permit that it possesses, even if its holding is substantially diluted.
Bank of Jerusalem’s market cap is NIS 1.2 billion, a little over a third of that of Isracard (NIS 3 billion). It believes that it has a better chance than Menorah Mivtachim of obtaining approval from the regulators for completing a deal. It stresses that it is a publicly traded bank, with a stable controlling core which will continue after the merger, and is supervised by the Bank of Israel. Bank of Jerusalem proposes a special dividend distribution of NIS 950-1,050 million to Isracard shareholders from Isracard’s cash, following which it will inject an unspecified amount of capital into the company so that it meets the required capital ratios.
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Bank of Jerusalem claims that a merger with Isracard will generate competition in both the banking and credit card markets, and that this will ultimately percolate through to consumers’ pockets. "In our view, our detailed offer, which has been approved by the Bank of Jerusalem board, represents a better offer than the other one that Isracard has received, and will carry value for its shareholders," Bank of Jerusalem CEO Yair Kaplan said.
Published by Globes, Israel business news – en.globes.co.il – on December 12, 2024.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2024.
