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Formula Systems

(Nasdaq:FORTY) group seems to be on a mission to buy back and delist its subsidiaries. A month and a half after the repurchasing and delisting


from Nasdaq, the group has published a tender offer for all the public's holdings in

Mashov Computers

, traded on the Tel Aviv Stock Exchange.

Formula is offering NIS 9 per share. If the public responds in full, the tender will cost Formula $26.5 million.

Although the tender offer is 21% above Mashov's opening price on Sunday morning on December 31, back in July Mashov traded at NIS 49 per share, a cool 5.5 times higher than Formula's tender offer. From the beginning of the year, Mashov shares have lost 66%, bringing the company's market cap to $47 million.

Formula chairman Dan Goldstein says that in recent years, Mashov has transformed into a holding company. There is no point in trading two Formula group holding companies on the TASE. Goldstein sees the steep losses suffered by technology shares as a good opportunity to buy back Mashov and to merge the two companies.

Mashov's paramount holding is

Magic Software Enterprises

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(Nasdaq:MGIC), which recently dual-listed for trade in Tel Aviv. Magic shares have lost 88% of their value this year as the company sank into crisis, as attested by its fourth-quarter earnings warning.

Goldstein pointed out that if Mashov shareholders believe that Magic is a good investment, they can now get in Magic directly rather than through Mashov.

If the tender offer succeeds and Formula delists Mashov from the TASE and adds Mashov's 30% holding in Magic with Formula's own 20%, Formula will come out with a 50% stake in Magic.

Goldstein does not think that the Formula group's tender offer price of NIS 9 per Mashov share is too low. Investors can decide for themselves whether whether the price is right, he says. Formula at any rate will try to acquire as many Mashov shares as possible, Goldstein says.

The Assia snag

Formula owns 53% of Mashov's equity, and Magic co-founder and former chairman David Assia owns 6.5% stake. Goldstein says that Formula has not reached an agreement with Assia about his interest in Mashov. It is therefore entirely possible that Formula will fail to attain more 95% of Mashov's equity, which it needs to do in order to delist Mashov from the TASE.

Goldstein says he has other plans for the Formula group companies, but one thing at a time. He was coy about these plans, but the market has been wondering whether Formula will tender for the public's holdings in Crystal Systems (Nasdaq:CRYS), which is apparently to dual-list for trade in Tel Aviv.

Aside from Magic, Mashov's main holdings are the computer school

Sivan Training & Systems Co.

, which recently merged with the TASE-traded but defunct company Makor Haformaika, and 25% of translation-software startup