Hagag Group set to buy Bazan stake from Israel Corporation

Israel Corporation (TASEW: ILCO) has signed a non-binding memorandum of understanding (MOU) with Hagag Group Real Estate Development Ltd. (TASE: HGG), controlled by Yehuda Eido Hagag and Yitzhak Hagag, for the sale of 16.69% of the shares in Bazan (Oil Refineries) (TASE: ORL) at NIS 1.1 per share (NIS 600 million), subject to adjustments for a dividend. The MOU also states that if options given to qualified investors to buy the remaining 7.3% of the shares in Bazan that it owns are not exercised, Israel Corporation will give Hagag Group an option to buy these shares within 30 days of the date of expiry of the option given to qualified investors. The exercise price of this option will be the higher of 90% of the average share price of Bazan on the Tel Aviv Stock Exchange in the fifteen days up to the date of the expiry of the qualified investors’ options, and NIS 0.91 per share.

The sale of the shares, if it takes place, will be in accordance with Israel Corporation’s agreement with Israel Petrochemical Enterprises (TASE: PTCH), which holds 15.46% of Bazan. Any sale agreement reached between Israel Corporation and Hagag Group will be subject to approval by the boards of directors of both companies, and completion will be subject to Hagag Group obtaining a license to control Bazan as required by the Government Companies Ordinance, within four months of the signing of a binding agreement (a period extendable by two months).

The MOU has a no-shop clause giving Hagag Group 45 days in which to carry out a due diligence examination.

Published by Globes, Israel business news – en.globes.co.il – on March 20, 2022.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2022.

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