Nofar Energy approaches the acquisition of a stake in Reindeer from Phoenix and others
Nofar Energy has confirmed advanced negotiations to acquire a 47.5% stake in the Reindeer power plant project. The deal to purchase shares from Phoenix and private investors is valued at 855 million shekels.
The energy company Nofar, controlled by Ofer Yanai and Bank Leumi, confirmed on Friday in a report to the stock exchange that it is in advanced negotiations to acquire a significant stake, and potentially control, in the Reindeer power plant project. Under the emerging deal, Nofar will acquire 47.5% of the station's shares: 39.5% from the insurance company Phoenix and 8% from five businessmen, most notably the founder of the Navitas oil and gas partnership, Gideon Tadmor, along with Yuval Harari and Yaakov Katz.
Simultaneously, Nofar announced a private issuance of preferred shares in its subsidiary, Nofar Europe, to Migdal Insurance. Migdal will invest 250 million shekels in exchange for preferred shares that grant priority dividend rights but no voting rights. For the first five years, Migdal will be entitled to a nominal annual dividend of 8.5%, increasing to 10% from the sixth year, 11.5% from the 11th year, and 13.5% from the 16th year. These shares cannot be redeemed by Nofar.
The Reindeer station is valued at 1.8 billion shekels in the deal. Nofar will pay 711 million shekels to Phoenix and 144 million shekels to the five private partners. The transaction will be executed through the subsidiary Nofar Israel, managed by Nadav Barkan, which recently added Meitav as a partner with a 200 million shekel investment at a valuation of 2.3 billion shekels.
Nofar is also considering acquiring a 35% stake held by Phoenix and private investors in an adjacent project. The 60-dunam site has the potential for additional infrastructure, such as another power plant, a data center, or an energy storage facility.
The station, to be built near Kfar Saba, will have a capacity of 865 megawatts and operate on natural gas. Construction costs are estimated at 5.3 billion shekels, with commercial operations expected to begin in 2030. The project is projected to generate 1.56 billion shekels in annual revenue, with an expected annual EBITDA of 619 million shekels. The project has already secured an 820 million shekel credit line from Bank Leumi.
Currently, the infrastructure fund Generation holds 27.5% of Reindeer, but its stake is expected to rise to 52.5% following a share swap with Rapac. In this deal, Generation will transfer its 16.7% stake in the Alon Tavor power plant to Rapac in exchange for Rapac's 25% stake in Reindeer. Upon completion, Generation and Nofar are expected to be the sole shareholders of Reindeer. This swap is part of Generation's strategy to secure regulatory approval from the Competition Authority for its acquisition of Shikun & Binui Energy for up to 4.5 billion shekels.
