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Shrem, Fudim Kelner rejected offer to invest in Kardan as strategic partner

Kardan denies offer was made; SFK says it doesn't want to get into Kardan through back door

By Ora Coren

Shrem, Fudim Kelner has rejected an offer to join the Kardan group as a strategic investor, say sources. Kardan denies that it made any such offer to SFK.

SFK shrugged off the proposal for reasons of policy and price, the sources said.

Anybody joining Kardan as a strategic partner would receive a proportional part of its holdings in the IDB group (23.62%). Kardan has yet to receive final watchdog approval for its acquisition of the share in IDB Holding Corporation, though.

Market sources do not believe that any strategic partner in Kardan would have a substantial say in IDB's business, based on assessments that its share in Kardan would range from only 10% to 20%.

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SFK had made a stab at acquiring an interest in IDB. But IDB chairman Leon Recanati elected to bring in Kardan instead.

SFK sources said yesterday the group has no interest in joining IDB "through the back door".

"The group sees no point in a minority share in an investment company like Kardan," an SFK source said.

To acquire the IDB Holding Corporation stake, Kardan needs to invest about $313 million. In September Kardan confirmed that it is negotiating to allocate 20% of its shares according to a company market value of $280 million. The company currently trades at a market cap of $156 million.

Sources at Kardan denied that it is seeking a minority partner in order to finance the IDB transaction. They said the company plans to use any proceeds therefrom to finance future investments. But market sources believe the timing is too great a coincidence.