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JP Morgan: Kardan replacement in IDB takeover hard to find

Analyst cites deteriorating security situation, regulatory restrictions

Following yesterday's collapse of the Kardan-IDB deal, JP Morgan updated its recommendation on IDB Development and Discount Investments.

Analyst Ali Riza Incekara estimates failure to conclude the deal could have a negative impact on the group's restructuring process, although it is possible that Leon Recanati, after selling his 20% stake in the family's Swiss bank DBTC, could increase his stake in the IDB takeover.

Incekara believes the chances a new foreign or local investor will enter the deal, are low. He attributes this to the deteriorating security situation and difficulties in obtaining regulatory approvals.

The analyst also notes that Discount Investments and IDB Development have underperformed the market by 7% and 8% respectively over the past month. He believes Discount Investments, rated ¿underperform¿, is trading at an 11% discount off its net asset value. Incekara rates IDB Development ¿market perform¿, noting its 20% discount.

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