British-Israel Investments Ltd. (TASE: BRTS), controlled by Leo Noe, is in talks to acquire Iris Hagilboa Construction and Development Ltd. from Bronfman Fisher Investments Ltd. Iris Hagilboa owns the IKEA Israel lot at Me'uyan Soreq in Rishon LeZion.
In a notice to the Tel Aviv Stock Exchange (TASE), British Israel said that no discussions had yet taken place on the terms of a deal or the price. It said that the company's board had not yet discussed or approved a deal, and that there was no agreement to announce yet.
In July 2006, a British Israel subsidiary signed a agreement with Bronfman Fisher Investments for a conditional allocation of Iris Hagilboa stock, whereby British Israel would receive between one third and 43.33% of Iris Hagilboa at the end of January 2007 or when the Me'uyan Soreq lot was opened.
The current deal proposes that British Israel will acquire all of Iris Hagilboa in exchange for allocating 10% of British Israel to Bronfman Fisher Investments. If a deal is closed, British Israel will wholly own the building occupying the Me'uyan Soreq lot, which is slated for the second IKEA Israel store. IKEA Israel will lease back the building for 20 years.
The proposed deal reflects a company value of NIS 1.5 billion for British Israel, and a company value of NIS 150 million for Iris Hagilboa. British Israel's share rose 7% to NIS 8.38, giving a market cap of NIS 1.05 billion.
A source close to Iris Hagilboa told "Globes", "There is no sale at the moment. There are only talks. British Israel had an option to come in from day one."
British Israel said in response, "The company, as part of its ordinary business, examines deals, and will make reports as required when it has something to report."
Published by Globes [online], Israel business news - www.globes-online.com - on June 3, 2009
© Copyright of Globes Publisher Itonut (1983) Ltd. 2009