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Abu Dhabi’s ADQ leads consortium to buy stake in Israel’s Phoenix Group
December 14, 2022
DUBAI/JERUSALEM, Dec 14 (Reuters) - A consortium led by Abu Dhabi state holding firm ADQ is in advanced negotiations to acquire a controlling stake in Israeli financial firm Phoenix Group (PHOE1.TA) for more than $800 million, a regulatory filing showed on Wednesday.
U.S. private investment firms Centerbridge Partners and Gallatin Point Capital, which hold 33.4% of the Israeli company, are in talks to sell about 25%-30% of the company based on a value of 9.2 billion shekels ($2.7 billion) to the Abu Dhabi funds, the two U.S. investment firms said in the regulatory filing in Tel Aviv.
Phoenix's chief executive and chairman would also buy 1%-2% of the company, the filing said.
"The transaction will be subject to regulatory approvals, which will include a control permit from Israel's Capital Market, Insurance and Savings Authority," Centerbridge and Gallatin said in the statement.
Some 58% of Phoenix's shares would remain traded on the Tel Aviv Stock Exchange.
ADQ is buying Centerbridge's stake in Phoenix, in a non-binding deal, which may take months to complete to receive regulatory and shareholder approvals, a source familiar with the deal said.
ADQ declined to comment.
The UAE became the first Gulf state to normalise relations with Israel under a U.S.-brokered normalisation agreement, dubbed the "Abraham Accords," in 2020.
Phoenix Group, one of the largest financial companies in Israel with a market capitalisation of around $2.8 billion, is a provider of multi-line insurance, asset management, investment and financial services.
The source familiar with the deal said ADQ had been doing extensive due diligence for months and that since Emirati investors are comprehensive, "they wouldn't sign if they thought the chances are low".
ADQ is buying into the Phoenix name, and the rationale is that it can make a good return on its investment, the source said, which has been enabled by the Israel-UAE normalisation and which is expected to lead to more deals.