IDB Holding Corp. (IDBH)’s shares rallied after an Israeli court approved a 2 billion-shekel ($570 million) debt deal that will give control of the company to an investor group led by Argentine businessman Eduardo Elsztain.
The shares soared as much as 36 percent before paring to 21 percent at 4.60 shekels at 2:27 p.m. in Tel Aviv, the biggest gain since Feb. 20, as the traded volume reached 13 times the three-month daily average. The holding company’s 1.07 billion shekels of 5.1 percent bonds due in December 2020 fell 24 basis points, or 0.24 percentage point to 31.89 percent, the lowest since Dec. 8.
IDB Holding shares have dropped 53 percent this year after more than a year of debtholder wrangling. Tel Aviv District Court Judge Eitan Orenstein yesterday gave preliminary approval to a plan by a group, which includes Extra Holding GmbH’s Moti Ben-Moshe, wresting control of the holding company Nochi Dankner spent more than a decade building.
“The court decision removed uncertainty in the stock and cleared the question of ownership,” Sharon Naveh, head of institutional and international sales at Migdal Capital Markets Ltd. in Tel Aviv, said by phone.
Extra’s Ben-Moshe said Dec. 11 the investor group will implement a growth strategy based on competition in IDB’s subsidiaries that will create value for bondholders, shareholders, employees, and customers.
Yesterday’s ruling is conditional on the investors providing additional financial disclosure to regulators by Dec. 29. The Elsztain-Extra plan includes a cash injection of 876 million shekels, as well as 650 million shekels deposited into an account by Extra, which is based in Neuss, Germany.
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