IDB Holding Corp. (IDBH)’s shares headed for the highest in five weeks and bond yields tumbled after a takeover offer valued the debt-strapped company at 1.03 billion shekels ($288 million), more than three times its market value.
The shares jumped 11.4 percent to 6.12 shekels, set for the highest close since July 7, at 1:49 p.m. in Tel Aviv. Volume was almost five times the three-month daily average. The yield on IDB’s 1.07 billion shekels of 5.1 percent bonds due in December 2020 plunged 184 basis points, or 1.84 percentage point, to 55.33 percent. The benchmark TA-25 Index of equities fell 0.4 percent.
Emblaze Ltd. (BLZ), based in Hertzliya Pituach, Israel, and Tel Aviv-based Netz Group Ltd. (NETZ) are offering 826 million shekels for an 80 percent stake in IDB Holding, according to a Tel Aviv bourse filing today. IDB is struggling to meet payments on about 2 billion shekels in debt and is mired in credit-restructuring talks. Chairman and controlling holder Nochi Dankner has been trying to sell assets and find investors to raise financing.
“The deal may be a solution for IDB and for Dankner to remain within the group,” Avihay Hermon, a trader at Israel Discount Bank Ltd. (DSCT) in Tel Aviv, said by phone today. “It is still not clear though if the investment will be made as investors have in the past pulled out of offers.”
Last month, Argentine businessman Eduardo Elsztain decided against further investment in IDB. The company’s creditors this week voted in favor of a debt restructuring plan which would divide IDB Holding’s shares among them. A bondholder vote, expected by Aug. 18 on several debt restructuring plans, could see chairman Dankner ousted.
Under the terms of the proposed deal, Netz Group will share 10 percent, or 82.6 million shekels, of the investment in IDB Holding and Emblaze will be the controlling holder. The partners will set-up a new company owned 70.3 percent by Emblaze and Dankner would own the rest.
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