Ayalon Insurance Explores Cal Acquisition Amid Regulatory Hopes
Translated & summarized from Globes by baba
Ayalon Insurance is considering acquiring Cal, a credit card company, after a previous deal with Union-Halel failed due to regulatory issues. Ayalon believes its smaller market share will improve its chances with regulators. Discount Bank, Cal's majority owner, is legally required to sell its stake by April 2027 and has held initial talks with Ayalon. The valuation of Cal may be lower now after it lost a key contract with El Al.
The story in 5 lines · by baba
- Ayalon Insurance is exploring the acquisition of credit card company Cal.
- A previous deal for Cal with Union-Halel collapsed due to regulatory concerns.
- Ayalon believes its smaller size improves its chances of regulatory approval.
- Discount Bank must sell its stake in Cal by April 2027.
- Cal's valuation may have decreased after losing the El Al 'Flycard' contract.
Ayalon Insurance is reportedly exploring the acquisition of Cal, a credit card company, following the collapse of a previous deal between Cal and the Union-Halel group for 4 billion shekels. The initial deal fell apart last month due to regulatory concerns, specifically the Competition Authority's objections related to Union's holdings in Super-Pharm, which conflicted with Cal's credit card services for Shufersal's Be pharmacies. Ayalon, a smaller player in the insurance market, believes its chances of gaining regulatory approval are improved compared to Union-Halel. Discount Bank, which owns 72% of Cal and is mandated by law to sell its stake, has held preliminary discussions with Ayalon. The deadline for Discount Bank to sell its Cal shares is April 2027. While the previous deal with Union-Halel could theoretically be revived through restructuring, market sentiment suggests this is unlikely. Ayalon, controlled by WiShore GlobalTech, sees Cal as a stable financial arm, attracted by the non-seasonal nature of credit card businesses. However, the valuation of Cal is uncertain, as it recently lost the "Flycard" contract with El Al to IsraCard, potentially lowering its market value. Cal's CEO, Yafit Gariani, has introduced a new travel card, "Flyaoul," but the loss of the El Al contract is seen as a significant blow.
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