Thailand's CP Group opts not to invest in Israel's Clal Insurance
JERUSALEM Aug 14 (Reuters) - Thailand's CP Group has quit a consortium of investors that sought to buy a stake in the insurance unit of debt-ridden IDB Holding, a move that could hurt IDB chairman Nochi Dankner's chances of keeping control of the conglomerate.
CP, owned by Thailand's richest man, Dhanin Chearavanont, had been in talks with to buy a 30 percent stake in Israel's Clal Insurance for around 1.4 billion shekels ($394 million). That would value Clal Insurance at more than 4.6 billion shekels - well above a current market value of 3.6 billion at Tuesday's close.
Along with CP - or Charoen Pokphand - were other potential investors, including Hong Kong's Li Haifeng.
The group also would have had an option to buy the other 25 percent of Clal Insurance, which is 55 percent owned by IDB Development, a unit of IDB Holding.
"The Thai investor will not participate in the deal and the Hong Kong investor is continuing to examine ways to make the deal together with other investors and according to the current timetable," IDB Development said in a statement to the Tel Aviv Stock Exchange on Wednesday.
A Tel Aviv court has set an August 22 deadline for IDB to sell at least half if its stake in Clal Insurance.
IDB did not elaborate on why CP pulled out, but the Haaretz newspaper cited concern that it would have difficulty in obtaining approval from Israel's capital markets regulator.
Many of the companies IDB owns have been hit by slowing economic growth and increased competition. IDB Holding owes bondholders 2 billion shekels and IDB Development owes a further 5.8 billion shekels.
Bondholders - mainly institutional investors led by U.S. hedge fund York Capital - of both companies have proposed a debt restructuring that would oust Dankner and give them full control of a combined company.
Dankner, though, is fighting to keep control of IDB, one of Israel's largest conglomerates. He has tried to sell off assets to pay off the debt, with Clal Insurance a major piece in the plan. So far, bondholders have rejected IDB's offers.
At the same time, Dankner is negotiating with a number of investors - including Argentinian businessman Eduardo Elsztain - to inject capital into IDB.
Shares of IDB Holding were down 2.6 percent in afternoon trading in Tel Aviv, while bond prices in the IDB Group were down as much as 6 percent. Clal Insurance shares slid 4.1 percent. ($1 = 3.55 shekels) (Reporting by Steven Scheer)
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