The transaction of acquiring control of the insurance company Ayalon Gets involved. The digital insurance company AssuranceWhich signed an agreement to purchase 67% of Ayalon shares, announced that it found significant discrepancies in some of the data provided to it prior to signing the deal with the trustee managing the estate of the late Ayalon founder, the late Levi Rahmani, and that following the disclosure it is considering further promotion.
According to Assurance Headed by Emil Weinschel and Nitzan Tze’ir-Harim, only a few days after receiving control permits for Ayalon from the Capital Market Authority, and after the company allotted shares in alignment to Caesarea Electronics of the couple Zvi and Anat Barak to meet the acquisition costs, and also after transferring an advance , Discrepancies were discovered regarding Ayalon’s ability to meet the solvency regime, Solvency 2, between reality and what was reported to the alignment before the deal was signed.
Therefore, yesterday, Tuesday, Vishor wrote a letter to the administrator of the estate, through Adv. Zvika Agmon, claiming that the data in the report she published Ayalon At the end of May, they apparently did not match, and presented a significant difference to, the information presented (and especially in relation to the solvency ratio for 2021) to the alignment, in discussions held prior to obtaining the necessary permits to complete the transaction. Vishor explained that this is “information on which the company and its control group relied, and on the basis of which, among other things, it is appropriate to assume additional obligations, including obligations that are included in the appendix to the obligation attached to the control permits.”
As a result, the digital insurance company required the estate manager to act so that before the transfer of control of Ayalon and prior to the completion of the transaction, a basic initial capital injection will be made that will return Ayalon’s solvency ratio to the rate presented to the capital market and the company. That was discovered.
The company further stated that if this demand is not met in the affirmative, it reserves the right to examine the options available to it in connection with the transaction, including the possibility of its cancellation. Vyshor emphasized that as stated in the Company’s previous reports on the subject, there is no certainty regarding the completion of the transaction, including for reasons beyond the Company’s control.
The stock fell, and the premium in the deal soared to more than 200%
In June last year, Vishor signed a deal to purchase the controlling shares in Ayalon Insurance Company (approximately 67%) from the heirs of Ayalon founder Levy Rahmani. In total, the scope of the purchase will reach 67% of Ayalon’s shares, for which NIS 472 million will be paid, with the addition of businessman Zvi Barak and his wife Anat to the acquisition. According to the original agreement, Caesarea Electronics of the Barak couple had to raise NIS 180 million in exchange for a share in Ayalon shares (through Caesarea Medical Medical), in parallel with an investment of NIS 90 million in the shares and Vishur itself. However, it was finally decided between the parties that Caesarea would flow the entire amount in exchange for alignment, in exchange for the allotment of 39% of its shares and their becoming a “quiet partner” in its controlling nucleus.
It should be noted that the transaction price for Ayalon reflected a value of 690 to Ayalon which was 33% higher than the market value at the time of signing the transaction (June 2021) and today already constitutes a premium of almost 80% on its current value, which stands at NIS 380 million (after falling by tens of percent Ayalon share since the deal was signed).
The Vyshor share has also fallen sharply since the date of signing the agreement between the Barak and Vyshor couple, last September. It was then agreed that the share price in the transaction with them would be NIS 6.3, which at the time reflected a premium of about 20% on the market price, but since then the share and premium in the deal with the Barak couple has soared to 202%. .
Despite the fall experienced by the shares of the two companies, sources close to the alignment estimate that no price adjustment will be made in the transaction and that they will remain similar to those agreed between the parties.
This assessment of the same factors is also based on the claim that the declines in stock prices are mainly due to the effects of the recent upheaval in the capital markets, and not due to an impairment of the companies’ core activities. According to them, the value given to Ayalon in the transaction is based on its equity, when it stood at NIS 680 million as of the end of last year.