Cal CEO Seeks Extension for Discount Bank's Share Sale
Translated & summarized from Globes by baba
Cal CEO Yafit Grani met with Ministry of Finance Director General Israel Meilach to request an extension for Discount Bank's sale of its 72% stake in Cal. The original deal with Union-Harel collapsed due to regulatory issues, and the bank has struggled to secure approval. Concerns remain about Cal's valuation and the political climate, complicating the sale process.
The story in 5 lines · by baba
- Cal CEO Yafit Grani requested an extension for Discount Bank's sale of its 72% stake in the company.
- The original sale to Union-Harel fell apart due to Competition Authority concerns about Union's other holdings.
- Regulators are divided on approving an extension for the sale, which has a legal deadline in April.
- Cal's valuation may decrease due to economic factors and the loss of its Flycard customer club.
- Political uncertainty and potential new elections could hinder legislative approval for a sale extension.
Yafit Grani, CEO of the credit card company Cal, has requested an extension from the Ministry of Finance for the sale of Discount Bank's holdings in Cal. Grani met with Israel Meilach, Director General of the Ministry of Finance, on Tuesday to formally ask for an unusual delay in the sale process.
Discount Bank, which owns 72% of Cal, initiated the sale process again earlier this month after the original agreement to sell Cal to the Union-Harel consortium expired. The initial deal, valued at up to 4 billion shekels, fell apart due to regulatory concerns raised by the Competition Authority regarding Union's ownership of Super-Pharm, a competitor to Be, which Cal provides credit card services for.
The request for an extension comes amid concerns that the sale might not be completed by the legal deadline in April. The Competition Authority's recent decision has put further pressure on the timeline. Some regulators support the extension, arguing the authority's ruling created a tight schedule, while others oppose it, citing the law's original intent to separate credit card companies from banks, a move stemming from the "Shtrom Committee" recommendations.
Cal's valuation is also reportedly expected to decrease due to economic factors, including the loss of its "Flycard" customer club to competitor Isracard. The ongoing political uncertainty and potential for new elections further complicate the possibility of legislative approval for an extension.
Notably, the request for a delay was made by Cal's CEO rather than Discount Bank, which is responsible for the sale. Cal did not provide a comment.
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