After a lull lasting several weeks, the race to buy credit card company Cal has started up again. Insurance company Harel, controlled by the Hamburger family, has teamed with George Horesh’s Union Investments and Development to make a bid for the 72% of Cal owned by Israel Discount Bank, according to a notification to the Tel Aviv Stock Exchange by Harel this morning.
Harel said that the move was "part of the company’s strategy of diversifying its sources of earnings and expanding its activity in the provision of credit." The notification also stated that First International Bank of Israel, which holds 28% of Cal, has the right to join the deal, that is, it can force Harel and Horesh to buy its stake in the credit card company as well.
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Harel adds that the bid was made in the framework of a call for offers from Discount Bank. The process is being managed for Discount Bank by US investment bank JP Morgan, which has generated interest among several international entities in buying Cal.
Earlier this year, Cal CEO Levy Halevy conducted a road show in London in which he presented the company to several large overseas entities. Harel and Horesh’s offer is non-binding. Bidders who pass the first stage of the process will be required to submit binding offers in the second stage.
Harel and Union will set up a corporation 51% owned by the latter and 49% owned by the former. They stressed that any deal will require regulatory approvals, including from the governor of the Bank of Israel and the Competition Authority. This is not a technical or marginal matter. Two years ago, Harel tried to buy Isracard, but the Competition Authority, fearing harm to competition in health insurance, thwarted the deal. It is not clear whether a deal to acquire Cal will have an easier regulatory pathway.
Among the overseas entities that have expressed interest in Cal are investment firms such as Blackstone, Centerbridge Partners, Gallatin Point Capital, and Apax Partners. In Israel, Menora Mivtachim, which failed in its bid to take over Isracard, is examining the possibility of bidding for Cal, alone or with others.
Harel and Union’s valuation of Cal has not been disclosed, and in any case is non-binding at his stage. Rival credit card company Max was sold for NIS 2.5 billion two years ago, and Yitzhak Tshuva’s Delek Group is in the process of taking over Isracard at a valuation of NIS 3.56 billion. Discount Bank hopes to obtain a valuation of over NIS 4 billion for Cal, which seems an ambitious goal, but in the light of the number of expressions of interest could prove realistic.
Published by Globes, Israel business news – en.globes.co.il – on May 7, 2025.
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