A consortium of three key investors signed a deal to acquire the controlling interest in IDB Holding Corporation yesterday. The buyers, led by the Ganden corporation, is paying $540 million for a 52.7% controlling stake in the company.
The deal is subject to approval by the authorities. It should be completed within six months.
In the deal, IDB's founding families, Recanati and Carasso, are handing control over to Ganden, which is controlled by Nochi Dankner, the Ta'avura haulage company controlled by Avraham Livnat, and businessman Yitzhak Manor.
The buyers paid a $50 million downpayment yesterday, which will be returned if the deal falls through. The deal values IDB Holding Corporation at $1.054 billion, compared with its current market cap of $766 million.
The parties agreed that until the deal is finalized, any substantial transactions pertaining to IDBH shall be subject to approval by the buyers, including the merger that was planned between the administrations of IDB's main subsidiaries.
Under the agreement, Ganden will own 31% of IDB, and Livnat and Manor will own 10% each. In effect, Nochi Dankner will control IDB.
It was consequently agreed that Dankner will chair the boards of directors of IDB Holding Corporation, IDB Development Corporation, Discount Investments Corporation and Clal Industries.
Dankner said that the acquisition constitutes a vote of confidence by all of Ganden's shareholders, including European and American investors, in the potential of Israel's economy and that of IDB, the largest holding company in the country.
Next week the buyers are expected to start the procedures to obtain the approvals required for the completion of the deal. The Supervisor of Banks is expected to make his approval contingent upon the selling of all of Dankner's holdings in Israel Salt Industries, which controls Bank Hapoalim, which extended a $900 million loan to IDB. If Nochi Dankner is required to sell his stock, he will probably sell it to the other branches of the Dankner family.
Since IDB controls Clal Insurance, and any acquisition of an insurance company must be approved by the Supervisor of Insurance, an approval will also be required from the Supervisor. In addition, an acquisition of more than 25% of the stock of any large company requires an okay from the Antitrust Commissioner. Also, since both Ganden and IDB have holdings in communication companies, an approval will be needed from the Communication Ministry.
The buyers will also be trying to get as much financing as possible from the banks. Because of the stringent policy implemented by the banks after the major write-offs they had to make recently, about 40% of the deal will have to draw on the buyers' own resources, informed sources told Ha'aretz. The buyers may be exploring the possibility of working with foreign banks, in order to get more convenient terms for their loans.
Ganden announced yesterday that in the last few weeks it raised $100 million from its shareholders.