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ADQ-led group’s bid for Israel’s Phoenix falls apart

Tel Aviv stock exchange Reuters/Amir Cohen
The non-binding agreement was 'mutually terminated', the sellers said in a letter to Phoenix that was posted on the Tel Aviv stock exchange

A deal for two shareholders in Israeli financial firm Phoenix Group to sell control of the group to a consortium led by Abu Dhabi state-owned ADQ has fallen through, a regulatory filing showed on Sunday.

US private investment firms Centerbridge Partners and Gallatin Point Capital, which hold about 33 percent of Phoenix, said last year they were in advanced talks to sell 25-30 percent of the company based on a 9.2 billion shekel ($2.5 billion) valuation to ADQ and other UAE and international investors.

However a non-binding agreement was “mutually terminated”, the sellers said in a letter to Phoenix that was posted on the Tel Aviv stock exchange. The letter cited regulatory limitations that would prevent members of the UAE consortium from making other “material investments in Israel”.

A spokesperson for ADQ told Reuters the group had no comment on the matter.

The sides were working on a deal for the UAE-led consortium to buy a much smaller number of shares in Phoenix, with Gallatin and Centerbridge keeping at least 30 percent as a controlling stake, according to the filing.

The UAE became the first Gulf state to normalise relations with Israel under a US-brokered agreement dubbed the “Abraham Accords” in 2020.

Phoenix Group, one of Israel’s largest financial companies, has a market capitalisation of around 9.85 billion shekels.