Nochi Dankner has found a use for the NIS 2 billion he made on investing in Credit Suisse, and today he marked a new investment target: the retailing industry. Today Koor, controlled by Nochi Dankner through Discount Investment (62.7%) of the IDB group, announced that it would buy shares in retail chain Carrefour to the tune of NIS 3.5 billion (630 million euro). Koor has already started buying Carrefour shares, and currently holds 0.25% of the company (some 1.76 million shares) at an investment of NIS 284 million.
The Carrefour chain is controlled by Bernard Arnault, one of France's most prominent businessmen. He holds several companies, among them fashion houses Gucci and Louis Vuitton. Carrefour operates in 33 countries, including France, Spain, Argentina, China, and countries in Eastern Europe. Its shares are traded on the Euronext market, where it has a market cap of €20.7 million. Carrefour is the second largest retail chain in the world, and the largest in Europe.
If Dankner exploits the entire investment framework, he will reach a 3% holding in the company, and will be its second largest shareholder. Nevertheless, Koor intends to be a passive investor in Carrefour. "This investment is an expression of confidence in Bernard Arnault, who has an exceptional understanding of retailing," a source close to IDB said. "The intention is to give backing to eh controlling shareholder and to remain passive investors."
IDB has retail activity in Israel through Shufersal Ltd. (TASE:SAE;Pink Sheets:SSLTF) (formerly Super-Sol), which it controls. However, no collaboration between Shufersal and Carrefour is expected.
At this stage, Koor intends to buy Carrefour shares on the market. The shares are very liquid, with daily turnover amounting to some €100 million, so that Dankner can reach a substantial holding through routine stock market purchases, without affecting the price.
HSBC will provide Koor with a €300 million credit line to finance the investment.
Koor's announcement about Carrefour has raised questions about the future of its investment in Credit Suisse. A year ago, Dankner decided to exploit the panic on financial markets and invested in shares of Credit Suisse to the tune of about $1 billion, giving him 3% of the bank. Following the stock market rally, he sold most of his holding, and remains with just 0.7%.
However, Dankner apparently does not intend to abandon the Swiss bank. "Koor will rebuild its position in Credit Suisse," Dankner told Reuters today.
Published by Globes [online], Israel business news - www.globes.co.il - on June 22, 2009
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