IDB Holding Corp. Ltd. (TASE:IDBH) unit Koor Industries Ltd. (TASE:KOR) notified the Tel Aviv Stock Exchange (TASE) today that it has reached a strategic cooperation agreement with China National Chemical Corporation (ChemChina). ChemChina subsidiary China National Agrochemical Corporation and Koor subsidiary Makhteshim Agan Industries Ltd. (TASE: MAIN) will, within two weeks, sign a merger agreement which includes the purchase of the public's shares in Makhteshim, taking the company private.
IDB chairman Nochi Dankner and CEO Haim Gavrieli departed for China on Sunday to close the sale of Maktheshim to ChemChina.
In addition to the public's shares in Makhteshim, ChemChina will purchase from Koor 7% of shares in Makhteshim at a price reflecting a company value of $2.4 billion for the company. When the deal is closed, ChemChina will own 60% of Makhteshim and Koor will own 40%.
Makhteshim's public shareholders will receive $1.27 billion for the sale of 53% of the company's shares, and Koor will receive $168 million for its 7% stake.
Koor added that ChemChina will arrange a non-recourse loan of $960 million for Koor, using Koor shares in Makhteshim as collateral. The loan will be repaid in full after seven years, and will bear an effective annual interest rate of 6%, based on today's LIBOR.
In early October, Makhteshim announced that ChemChina offered $2.72 billion for the company, a 60% premium on its market cap at the time. A month later, Makhteshim reported that it had accepted a ChemChina request to cut the price tag 12% to $2.42 billion, or NIS 20.30 per share.
Makhteshim's share price rose 8.9% immediately after the report to NIS 18.40 giving a market cap of almost NIS 8 billion.
Published by Globes [online], Israel business news - www.globes-online.com - on December 28, 2010
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