Israel's IDB Development Corp agreed to sell 49.9 percent out of its 60.5 percent stake in Clal Industries and Investments (CII) to U.S.-based Access Industries in a cash deal that values 100 percent of CII at 2.55 billion shekels ($665 million).
Under terms of the agreement, IDB will receive 16.19 shekels per share in cash at the closing of the transaction, it said on Sunday. The purchase price represents a 41.7 percent premium to the latest closing price of the shares and a 15.6 percent premium based on a three-month average closing price.
Its shares jumped 10.2 percent to 12.59 shekels in morning trade in Tel Aviv.
CII is one of Israel's leading investment companies with holdings ranging from manufacturing-oriented activities to technology companies. It also operates units to manage its investments in biotechnology and other venture capital investments.
IDB, a holding company and subsidiary of IDB Holding , said it is expected that Avi Fischer, CII's co-chief executive, will serve as CII's executive chairman after the deal closes.
"It is significant that in these days of economic uncertainty, Access has ... elected to invest commercially in a major way. This step reflects both the robustness and the strong potential of the Israeli market," Nochi Dankner, chairman of the IDB Group said in a statement.
Len Blavatnik, chairman and founder of Access Industries, said CII has strong complementary assets to Access' portfolio.
Access, a privately held industrial group, was founded in 1986. It focuses on three sectors: natural resources and chemicals; telecommunications and media; and real estate. Its holdings include Warner Music Group.
The transaction is subject to regulatory approvals.
Shares in IDB Holding were up 11.3 percent in morning trade.
This article is copyrighted by Reuters
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