New Bidder Enters Race to Acquire Cal Credit Card Company

A new, unexpected player has entered the bidding for the Israeli credit card company Cal. Dedi Cars, led by Gil Agmon, has begun discussions with Discount Bank regarding the acquisition of Cal, with Agmon reportedly aiming for a swift deal. Dedi Cars' board has approved the move, though progress is pending clarification of the bank's ongoing negotiations with the Horesh-Harel group. Agmon's strategy for a quick transaction is partly based on the expectation that Dedi Cars will face fewer regulatory hurdles than Horesh-Harel encountered. Discussions about the potential deal reportedly took place at Agmon's son's wedding last week, attended by Discount Bank representatives. Agmon is reportedly targeting a price of 3 to 3.5 billion shekels, lower than the original deal price agreed upon by Horesh and Harel. Dedi Cars' attempt to obtain due diligence reports prepared for Horesh-Harel was unsuccessful.

Discount Bank is reportedly waiting until November 1, the deadline for the conditions of the Horesh-Harel deal to be met. During this period, the bank will attempt to finalize a new deal with Horesh and a third partner. If this fails, a new tender process is expected. To expedite this, the bank has conducted its own due diligence. The bank may be wary of proceeding without a tender, especially after a class-action lawsuit was filed alleging that a higher bid from Motty Ben-Moshe was not chosen in a previous tender.

Dedi Cars, which recently acquired Veridis, is seeking businesses with strong cash flow, a category Cal fits. It is believed Dedi Cars aims to acquire 50-55% of Cal's shares, allowing for a phased acquisition or partnership. Discount Bank is obligated to retain no more than 40% of Cal's shares by May 2027. The original deal, signed in September 2025, involved Horesh and Harel acquiring Cal from Discount Bank (72% stake) and International Bank (28% stake) for 3.7 billion shekels, with potential additional payments of 300 million shekels. This deal collapsed on September 20 due to the Competition Authority's concerns about potential information sharing between Cal and Super-Pharm, a competing pharmacy chain owned by Union, a partner in the Horesh-Harel bid. Union has proposed solutions, including a supervisor for information transfer or separation of directorships, but disagreements persist.

Union is in advanced talks with investment fund Glilot to join the deal as a major partner, potentially reducing Horesh and Union to minority stakes. This move might appease the Competition Authority. Glilot has a 15% stake in Discount New York and some influence within the bank. Horesh and Harel face a 187 million shekel penalty if the deal falls through, adding pressure to find a resolution. Discount Bank is also considering other options, including a new tender that could involve bidders like Centerbridge, Ayalon, and Jerusalem Bank. The bank is also preparing a prospectus for Cal's IPO as a last resort.

Discount Bank has requested an extension from the Ministry of Finance and the Bank of Israel to complete the sale, citing regulatory delays. However, legislative changes to extend the deadline are unlikely to be approved before the upcoming elections. Dedi Cars, with a market value of 1.7 billion shekels, recently increased Agmon's stake to 59% after acquiring about 10% in August. Despite Dedi Cars' relatively low market valuation, its subsidiary Veridis is reportedly worth more than the parent company. Agmon and Dedi Cars may bring in one of the investment funds as a partner. Cal, led by CEO Yafit Grani, is the most profitable of the three major credit card companies, with an annual profit of 350 million shekels.