Luzon offers NIS 470m for Phoenix's Dorad stake and tests how accessible Dorad value really is
A non-binding offer for 10% of Dorad puts the power company at a NIS 4.7b valuation, above the value set in the Elomay separation process. The value could rise, but funding and approvals are now the real test.
LUZON GROUP reported on April 23 that, after board approval, it submitted on April 20 a written offer to Phoenix Insurance and Phoenix Pension and Provident to acquire their full holdings in Dorad Energy. The stake on the table is 10% of Dorad's share capital and voting rights, and the offered consideration is NIS 470 million, implying a NIS 4.7 billion value for Dorad. The company also agreed to an auction process, but the filing makes clear that there is no certainty the offer will become an agreement.
This event does not stand alone. A few weeks earlier, the company won the auction to acquire Elomay's stake in Elomay Luzon, a transaction that values Dorad at an EV (enterprise value before debt and cash adjustments) of NIS 4.4 billion and is expected to require net consideration of about NIS 560 million. The Phoenix offer lifts the reference point by about 6.8%, but it also adds another funding layer on top of a transaction that already requires substantial capital.
What works here is the asset itself. Dorad operates a private power plant in Ashkelon with maximum capacity of about 850 MW, generated NIS 605.4 million of operating cash flow in 2025, and distributed a NIS 200 million dividend to its shareholders. Still, for the parent company, value is not measured only by Dorad's implied valuation. It is measured by how much of that value can be acquired, financed, and moved up the structure without making the parent's balance sheet more stretched.
The Phoenix offer raises the price tag, but it is still not a deal
The important detail in the Phoenix offer is not only the NIS 470 million. The important detail is that the company is seeking to buy a direct stake in Dorad, not only increase its holding through Elomay Luzon. If the offer advances, the company would add direct exposure to the energy asset alongside the indirect exposure it already has through Elomay Luzon.
The filing also sets a clear limit on the interpretation. The offer is non-binding, no purchase agreement has been signed, and the filing does not disclose conditions, a funding source, or a closing timetable. So NIS 4.7 billion is, at this stage, the value the company is willing to put on the table, not a value set in a signed transaction.
The gap versus the Elomay transaction matters. In the auction against Elomay, the value set for Dorad was NIS 4.4 billion, and the expected net consideration for Elomay's stake in Elomay Luzon is about NIS 560 million. The Phoenix offer says the company is willing to pay slightly more per percentage point of Dorad, perhaps because a direct Dorad stake is easier to understand than a holding through an intermediate layer. But the market will not receive cash at the parent level until price, funding, and approvals turn into binding documents.
If both transactions close, Dorad exposure could rise to 43.75%
Before the April transactions, the company's economic exposure to Dorad was 16.875%, through a 50% holding in Elomay Luzon, which owns 33.75% of Dorad. Acquiring Elomay's stake in Elomay Luzon, if completed, would lift the exposure to 33.75%. Acquiring the Phoenix stake, if that also completes, would add another direct 10% and bring the possible exposure to 43.75%.
The chart explains why the Phoenix offer matters even though it is not yet binding. The company is already in a process that increases Dorad's weight in its asset base, and a second offer could turn Dorad from an important value driver into an asset that dominates the company's profile. That can surface value if Dorad continues to distribute cash and advances Dorad 2, but it also makes funding access a more critical question.
Existing funding explains why the price tag is not enough
For the Elomay transaction, a short-term funding source has already been chosen: on April 20 the company entered framework agreements with two financial institutions to issue private, non-tradable commercial paper, or short-term corporate paper, for NIS 570 million. The principal is for one year, can be shortened with prior notice, and bears prime-rate interest that is paid together with the principal at maturity. That funding is aimed at acquiring Elomay's stake, not at the Phoenix offer.
The relevant cash view here is all-in cash flexibility: what remains after debt service, dividends, investments, acquisitions, and actual cash uses. In the company's solo liability schedule, before the new commercial paper and before the Phoenix offer, first-year principal and interest payments totaled NIS 233.7 million. The Elomay transaction was added on top of that, and the Phoenix offer could be added again if it matures.
| Move | Amount or stake | What it tests |
|---|---|---|
| Acquisition of Elomay's stake in Elomay Luzon | Expected net consideration of about NIS 560 million | Whether the company can fund full control of the Elomay Luzon layer without weakening the parent |
| Private commercial paper for the Elomay deal | NIS 570 million for one year at prime interest | Provides a short-term source, but creates a refinancing or repayment test within one year |
| Phoenix offer | NIS 470 million for 10% of Dorad | Adds potential direct exposure, but with no detailed funding source yet |
| First-year solo liability schedule | NIS 233.7 million of principal and interest | Shows that the company entered the event with near-term cash uses already in place |
On April 3, the company also signed with More to form a Polish real-estate developer financing activity, initially funded by NIS 200 million of shareholder loans in equal parts by the limited partners. That is not part of the Dorad transaction, but it reinforces the same point: the company's capital allocation is expanding in several directions at once, while the largest asset requires more money to turn paper value into a larger holding.
Dorad 2 supports the valuation, but adds more conditions on the way
Dorad is not only an existing power plant that distributes cash. It is also advancing Dorad 2, an expansion of the power plant within the existing Ashkelon site. If the expansion is carried out, total plant capacity is expected to increase from 850 MW to 1,510 to 1,580 MW. That is a clear reason buyers are willing to discuss a multi-billion-shekel valuation.
But here too there is a difference between potential and execution. On March 29, Dorad's board approved an agreement with GE to reserve major equipment, including gas and steam turbines and related equipment. The reservation consideration is about 5% of Dorad 2's total cost, estimated at NIS 4.0 to 4.6 billion, and about 20% of the equipment cost to be purchased from GE. At this stage, the reservation is expected to be paid from Dorad's own sources.
The equipment reservation matters because it points to a move from intent to actual expenditure. On the other hand, if the final equipment purchase documents are not signed by September or by financial close, whichever comes earlier, the reservation consideration will be forfeited. Dorad 2 still depends on permits, financing, approvals, and regulatory developments, so the justification for a high valuation does not replace the execution test.
Dorad's debt structure also matters. On February 26 Dorad made an early repayment of its senior debt, and in March the company updated that Dorad had received a NIS 2.1 billion bridge financing facility at prime to prime plus 1%, for one year with an option to extend by another year. The goal is for the bank to become the sole lender at this stage, until financial close, meaning binding financing agreements, for Dorad 2. That simplifies the lender structure, but it does not eliminate the test of long-term financing and distribution restrictions.
The next step depends on a binding agreement and parent-level funding that does not strain the balance sheet
The next filing that changes the picture will likely be one of three things: a binding agreement with Phoenix, a clear funding source for the offer, or an update showing that the Phoenix offer did not advance. Until then, NIS 470 million is a signal of appetite and possible value, not a full change in the ownership structure.
The main risk is that the company succeeds in increasing its Dorad exposure, but does so mostly through short-term debt or funding that requires quick refinancing. In that case, Dorad's value may rise on the balance sheet and in the investment story, but the parent's flexibility could erode before Dorad dividends or progress at Dorad 2 produce additional cash.
The other side is also real. If the Elomay deal closes, the Phoenix offer becomes an agreement at a price the company can fund, and Dorad 2 advances to financial close without tighter distribution limits, Dorad can become a much more central and accessible asset for the company. At this stage, it is still a three-part test: price, funding, and approvals. Without all three, the NIS 4.7 billion valuation remains mainly a statement about possible value.
Disclosure: Deep TASE analyses are general informational, research, and commentary content only. They do not constitute investment advice, investment marketing, a recommendation, or an offer to buy, sell, or hold any security, and are not tailored to any reader's personal circumstances.
The author, site owner, or related parties may hold, buy, sell, or otherwise trade securities or financial instruments related to the companies discussed, before or after publication, without prior notice and without any obligation to update the analysis. Publication of an analysis should not be read as a statement that any position does or does not exist.
The analysis may contain errors, omissions, or information that changes after publication. Readers should review official filings and primary sources before making decisions.