Harel Investments Insurance and Finance wants to acquire Isracard credit card for NIS 2.72 billion


by Ifi Reporter Category:Banking Jan 8, 2023

Towards a huge deal in the credit market? The Harel Investments Insurance and Finance Group, controlled by Yair Hamburger, submitted a proposal this evening to the board of directors of the Isracard credit card company for the acquisition of full ownership in Isracard (100%) - the largest company in the credit card industry in terms of the number of active cards and the scope of its credit card usage.
The proposal of Harel Investments, managed by Michel Siboni, talks about a transaction through a reverse triple merger for NIS 2.72 billion - an amount that is a premium of about 26% compared to the market value of Isracard, managed by Ran Oz, which stood as of the end of trading today About NIS 2.15 billion This is Harel's initial offer which is similar to Israchart's equity as of the end of September 2022.
The execution of the deal, if the parties sign a binding agreement to be approved by the boards of directors of Israchart and Harel, will be subject to the approval of Israchart's general meeting as well as the various regulators.
If Harel Investments does complete the purchase of Isracard, it will be the second transaction in which an institutional body acquires a credit card company, since these days Clal Holdings is about to complete the purchase of Max from Warburg Pincus for approximately NIS 2.47 billion. If the two transactions are completed, two insurance companies will control two of the three largest credit companies in Israel.
Ben Hamburger, Deputy Chairman of the Board of Directors of Harel Investments, who is leading the move on behalf of Harel, stated that: "For a long time now we have been considering a variety of strategic moves to diversify the group's sources of profit and add another foot of activity alongside our existing and stable activities in the insurance and financial sectors.
It is our intention that Isracard will continue to operate as an independent and separate company while maintaining the values of the existing management and the excellence of its employees, while at the same time we will allow it to benefit from Harel's business experience, financial solidity and reputation, and thus the company will be able to accelerate its growth plans."
Harel Investments offered to pay a significant premium of approximately 26% over the market price for Israchart, with the understanding that this is a long-term strategic transaction. The financing structure of the transaction has not yet been determined, but due to Harel's financial strength and liquidity, it has a variety of options available to complete the transaction. Harel Investments has liquid balances of about NIS 2 billion, while its gross debt is less than NIS 600 million."



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