Bondholder representatives of IDB Development Corp. and its parent are seeking to take over the Israeli investment company’s shares and wrest control from Chairman Nochi Dankner.
IDB Development and IDB Holding Corp. said they received a copy of the bondholder plan and will be contesting it, according to a filing to the Tel-Aviv Stock Exchange and an e-mailed statement. The accord requires court approval, the Globes business daily reported on its website.
Dankner has spent the past 15 years building the family business that made its fortune in table salt and real estate and includes Israel’s biggest supermarket chain, Shufersal Ltd. (SAE), and the largest mobile operator, Cellcom Israel Ltd. (CEL)
“The risk of Dankner losing control of the IDB group of companies has increased dramatically,” Richard Gussow, a senior analyst for DS Securities & Investments Ltd. in Tel Aviv, said today by phone. “I don’t see any immediate impact on IDB subsidiaries Shufersal or Cellcom from the change of ownership.”
IDB Holding, which has been seeking funds to meet payments on about 2.06 billion shekels ($557 million) in debt, is in debt-settlement talks with bondholders. The company in March proposed a debt arrangement to transfer 15 percent of its shares to bondholders and to make a 500 million-shekel cash injection. IDB Development owes 6 billion shekels to bondholders and banks.
The bondholder representatives serve investors including Psagot Investment House Ltd, Phoenix Holdings Ltd. and York Capital Management LP, according to an e-mailed statement. Banks which also hold IDB debt will have to agree to the deal. IDB said today it intends to present IDB Holding bondholders a “much better offer.”
IDB Holding shares fell 2.6 percent in Tel Aviv yesterday, bringing a decline this year to 17 percent. That compares with a gain of 2.5 percent for the benchmark Tel Aviv 25 Index. Israel’s market is closed today for the weekend.
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