Delek sells entire Delek Automotive stake
12 December 2019 - globes
Delek Group has sold 22.5% of Delek Automotive's shares to institutional investors and Gil Agmon for NIS 404 million.
Delek Group Ltd , controlled by Yitzhak Tshuva, has sold its remaining 15% stake in Delek Automotive Systems Ltd. (TASE: DLEA) to investment institutions. Delek Group reported today to the Tel Aviv Stock Exchange that the sale would be completed today at NIS 19.27 per share, the same price at which Delek Group recently sold 7.5% of Delek Automotive's shares to Gil Agmon, raising Agmon's stake in Delek Automotive from 37.5% to 44.97%. The price in these deals was a 20% premium on the Thursday's closing price for the share.
Delek Group's proceeds from its remaining holding total NIS 269 million, and NIS 404 million together with the Agmon deal. Delek Group will post a NIS 117 million capital gain in its fourth quarter financial reports.
Delek Group said, "The sale of the group's stake in Delek Automotive is another strategic measure by the group aimed at focusing its activity on the energy sector in Israel and overseas."
Delek Automotive's share price responded to the report by jumping 14% on a high turnover on Sunday, and rose a further 6% to NIS 19.50 the next day, completing an increase of over 50% in the past month and pushing the company's market cap up to NIS 1.8 billion.
Delek Group's share price responded today with a 1% increase, but is down 26% over the past year, bringing the company's market cap down to NIS 5.6 billion.
Delek Automotive imports and sells Mazda, Ford, BMW, and compact vehicles. The company also has environmental and infrastructure activity in Israel through Veridis, in which it acquired a 70% controlling interest at a cost of NIS 1 billion 18 months ago.
The sale of Delek Group's holdings in Delek Automotive is part of a general sale of its holdings outside the energy sector in recent years. A month ago, Delek Group completed the sale of its 32.5% stake in Phoenix Insurance to foreign funds Centerbridge Partners and Gallatin Point Capital for NIS 1.6 billion. Shortly afterwards, Delek Group completed the acquisition of Chevron's North Sea oil assets for $1.8 billion.
Two weeks ago, Delek Automotive announced its third quarter results, with a 180% leap in net profit in the quarter, compared with a NIS 94 million net profit in the third quarter of 2018. Its revenue, however, dropped slightly to NIS 862 million.
Delek Automotive's gross profit and gross profit ratio improved in the quarter, mainly as a result of foreign currency changes, the mix of cars sold (despite a decrease in the total number of cars sold), and grants for the environmental sector. Veridis also made a significant contribution to the company's results.
Delek Automotive's total car sales fell from 4,000 in the third quarter of last year to 3,500 in the third quarter of 2019, a 13% decrease, and from 16,600 in January-September 2018 to 13,700 cars in January-September 2019, a 17% decrease.
Delek Automotive's net profit surged 70% to NIS 262 million in the first three quarters of this year, while its revenue was steady at NIS 2.85 billion. Delek Automotive benefited from a strong rise in the profits of associated companies and a positive change in financial items during this period.