Ofer Nimrodi sells half of Ma'ariv

Zaki Rakib bought the stake in the Hebrew daily based on a company valuation of $35 million.

Zaki Rakib has bought 50% of Ma'ariv Holdings Ltd. (TASE: MARV), which owns Hebrew daily "Ma'ariv" from Israel Land Development Company (TASE: ILDC), at a company value of $35 million, a 6% premium on its market cap.

Ma'ariv Holdings has been financially troubled for a long time, and its management has been undertaking streamlining measures, including layoffs, while seeking an investor.

Rakib and Ma'ariv Holdings chairman Ofer Nimrodi today signed a term sheet on the deal. Rakib will invest $15 million for a 30% stake in the company, and will become its chairman.

Rakib will initially invest $10 million for a 22.5% stake in Ma'ariv. Within 30 days after the initial investment, Rakib will invest an additional $5 million, and will increase his stake to 30% subject to the company improving its credit structure. He will also receive options to buy an additional 20% of the company at the same valuation.

Rakib said, "This is a challenge and a great honor to be part of the group that will lead Israel's communications industry into the next era. Ma'ariv has significant business potential, and I believe that together the current management, Ma'ariv will continue to be an influential player that sets and designs the public and national agenda in Israel."

Ma'ariv Holdings' share price fell 4.6% in early trading today to NIS 4.75, giving a market cap of NIS 124 million. Israel Land's share price rose 3.7% to NIS 24.93, giving a market cap of NIS 650 million.

Published by Globes [online], Israel business news - www.globes-online.com - on March 1, 2010

© Copyright of Globes Publisher Itonut (1983) Ltd. 2010

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