Nochi Dankner is in advanced talks to sell 10-30% of Ganden Holdings Ltd., through which he controls IDB Holding Corp. Ltd. (TASE:IDBH) for $25-100 million to Eduardo Elsztain, IDB notified the TASE today. Elsztain is an Argentinian businessman, who owns one of the country's largest real estate companies. The connection between Dankner and Elsztain was made by Rabbi Yoshiyahu Pinto.
IDB said, "There are various contracts for an investment in the controlling shareholder, Ganden Holdings, including advanced talks for an investment by a group controlled by Mr. Eduardo Elsztain, in which the parties have reached understandings in principle for an investment of $25-100 million, which will give the investor 10-30%, respectively in Ganden." IDB cautions that no agreement has yet been reached on certain important issues, including a shareholders agreement in Ganden.
IDB added, "If and when the investment agreement is completed and signed, Ganden intends to inject part of the investment proceeds, in an amount yet to be determined, into the company."
Ganden owns 21.18 million IDB Holding shares, for a 45.87% stake in the company.
In a separate development, IDB subsidiary Discount Investment Corporation (TASE: DISI) notified the TASE today that Midroog Ltd. has put its bonds on the watch list with an A3 rating and "Negative" outlook. Midroog said, "The company is characterized by business and financial weakness, and a sharp reduction in its market cap." Discount Investment has five bonds traded on the TASE.
Midroog also noted the suspension in June of the planned merger between Discount-Investment with subsidiary Koor Industries Ltd. (TASE:KOR), which owns 40% of Makhteshim Agan Industries Ltd. and a stake in Credit Suisse Group AG (NYSE: CS; SWX: CSGN; XETRA: CSGZ). Midroog said that this merger could have helped Discount Investment's financial situation.
Midroog estimates Discount Investment's liquidity at over NIS 900 million, following the sale of its holdings in Ham-Let (Israel-Canada) Ltd. (TASE: HAML) and Maxima Air Separation Center Ltd. (TASE: MAXM-M) for NIS 255 million and NIS 155 million, respectively. It adds that Discount Investment needs NIS 1.1 billion to service its debt over the coming year, and it estimates the company's dividends from subsidiaries at NIS 250-300 million over the same period. Midroog concludes, "The ability to service the debt greatly depends on the sale of assets."
Discount Investment's subsidiaries include Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL), Shufersal Ltd. (TASE:SAE), Property and Building Ltd. (TASE: PTBL), Given Imaging Ltd. (Nasdaq: GIVN; TASE: GIVN), and Elron Electronic Industries Ltd. (TASE: ELRN). Its latest sale was Hebrew daily "Ma'ariv" to Shlomo Ben-Tzvi.
IDB Holding's share price rose 4.1% in morning trading, following the announcement, to NIS 14.59, giving a market cap of NIS 670 million. Discount Investment's share price fell 0.35 to NIS 7.52, giving a market cap of NIS 643 million.
Published by Globes [online], Israel business news - www.globes-online.com - on September 19, 2012
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