Even as Nochi Dankner is in advanced talks to sell Clal Insurance Enterprises Holdings Ltd. (TASE: CLIS) to Pan-European Permira Funds LLC, the company is in talks to sell its US operations. In a notice to the TASE, Clal Insurance confirmed a "Globes" report that it has received an offer of $312 million for all of Clal US Holdings Inc., which wholly owns Guard Financial Group Inc., which in turn owns Guard Insurance Group Inc.
Clal Insurance acquired Guard Financial Group at a company value of $120 million five years ago; a sale at $312 million reflects a return on investment of 150% in dollar terms, but around 100% in shekel terms, due to the shekel's 20% appreciation against the dollar since the original acquisition.
Clal Insurance said that the offer was from a third party, but sources inform ''Globes'' that it is apparently a foreign company. Clal Insurance announced is also in talks to sell its UK operations, Broadgate Underwriting Ltd., which is syndicated with Lloyds of London.
Clal Insurance's investment in Guard has been successful above and beyond the increase in value; Guard has contributed to Clal's profit every year. If Clal sells both Guard and Broadgate, this will bring its overseas operations to an end.
Clal Insurance is reportedly selling Guard as part of IDB Holding Corp. Ltd. (TASE:IDBH) talks to sell the company to Permira, which apparently is not interested in Clal Insurance's non-Israeli operations, if and when it closes a deal.
When Clal Insurance acquired Guard in 2007, it was in the accident and health insurance business. It has subsequently expanded operations, and is currently licensed to operate in 46 US states. The company's income from premiums rose to NIS 865 million in 2010 from NIS 779 million in 2009 and NIS 771 million in 2008. Guard contributed NIS 123 million to Clal Insurance's profit in 2010, down from NIS 144 million in 2010, by six times the NIS 20 million contribution in 2008.
Clal Insurance's share price rose 3% in morning trading to NIS 80.87, giving a market cap of NIS 4.4 billion.
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