IDB Holding Corp. (IDBH)’s shares are set for the highest close in two months after a Tel Aviv court gave controlling holder Nochi Dankner two months to file a repayment plan and preserve a stake in the holding company.
The shares jumped 5.2 percent to 7.15 shekels, poised for the highest close since June 23, at 12:32 p.m. in Tel Aviv as the number of shares traded reached more than twice the three-month daily average. The yield on IDB’s 1.07 billion shekels ($297 million) of 5.1 percent bonds due in December 2020 jumped 292 basis points, the most on a closing basis since May 2, to 51.5 percent.
Dankner, who is trying to sell assets and find investors for his holding company, which has about 2 billion shekels of debt, has until Oct. 20 to come up with a repayment plan, according to a Tel Aviv court statement today. The delay in the debt proceedings until a Nov. 25 court hearing came after the company secured a 500-million shekel deposit and agreed to the sale of part of its stake in Clal Insurance Enterprise Holdings Ltd. (CLIS) for 1.47 billion shekels.
“The extension buys Dankner some time to try and retain a stake in the company,” Avihay Hermon, a trader at Israel Discount Bank Ltd. (DSCT) in Tel Aviv, said by phone today. “There is still uncertainty though who will be the controlling holder of the company.”
Emblaze Ltd. (BLZ), based in Hertzliya Pituach, Israel, and Tel Aviv-based Netz Group Ltd. (NETZ) on Aug. 15 offered 826 million shekels for a 80 percent stake in IDB Holding. That values the company at 1.03 billion shekels, more than three times its market value. The two partners will set up a new company owned 70.3 percent by Emblaze and Dankner would own the rest.
Argentine businessman Eduardo Elsztain has been in talks with bondholders’ trustees for an investment of 770 million shekels in exchange for a 51 percent stake in the IDB Development Corp. unit. Bondholders of IDB Holding and IDB Development, which includes York Capital Management LP, joined hands in May to force a debt-to-equity swap, increasing the possibility that Dankner may lose full control of the companies.
Dankner turned a family business that made its fortune in table salt and real estate into a sprawling holding company with stakes in Israel’s biggest supermarket chain, Shufersal Ltd. (SAE), and its largest mobile operator, Cellcom Israel Ltd. (CEL) The combination of unprofitable investments and regulations to boost competition, cut IDB Holding’s market value to 348 million shekels from 5.06 billion shekels at the end of 2010, according to data compiled by Bloomberg.
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