Delek Group to Acquire Control of Isracard for NIS 3.56 Billion - Beats Menorah Mivtachim’s Offer

Delek Group, controlled by businessman Yitzhak Tshuva, has reached a significant agreement to acquire control of Isracard, Israel's leading credit card company, for a reported NIS 3.56 billion. The deal follows a previous agreement between Isracard and Menorah Mivtachim, valued at NIS 3.15 billion, which was ultimately canceled after Menorah chose not to improve its offer.

As part of the cancellation, Isracard will compensate Menorah Mivtachim with NIS 62 million, which an advance payment from Delek Group will partially cover. Despite the compensation obligation, Isracard's board of directors has determined that Delek's improved offer is more favorable.

Under the terms of the new agreement, Delek Group will inject NIS 1.3 billion into Isracard, increasing its stake in the company to 40%, up from its current holding of 4.9%. This substantial investment will allow Tshuva's group to acquire significant control over the credit card giant. Before the issuance of the new shares, Isracard shareholders will receive an extraordinary dividend, funded by Delek’s cash injection. This move will leave existing shareholders with a diluted stake in exchange for immediate liquidity.

Regulatory Hurdles and Shareholder Approval
The deal still faces several regulatory hurdles before it can be finalized. The Isracard shareholders must approve the acquisition in a special meeting scheduled for January 15, 2025. Additionally, Delek Group will require regulatory approvals, including a control permit from the Bank of Israel and clearance from the Israel Competition Authority. The key concern will be whether the Bank of Israel grants Delek Group the control permit, especially given Tshuva’s previous involvement in leading debt restructuring processes in companies under his control.

Market Impact and Future Prospects
This acquisition comes at a time when Israel’s financial sector is undergoing significant consolidation, with large corporate players vying for control of key financial institutions. Delek Group's purchase of Isracard could reshape the competitive landscape of the credit card and payments industry in Israel, especially if Tshuva's vision for Isracard includes leveraging Delek’s financial resources and broad market reach.

While the deal is subject to regulatory scrutiny, the increased investment in Isracard positions Delek Group to potentially benefit from the growing fintech and payments sector in Israel. The full impact of this acquisition will become clearer once the regulatory approvals are secured and the transaction is completed.