Apax Partners Israel, headed by Zehavit Cohen, has filed a request in the Jerusalem District Court for a halt in the sale of cinema chain Globus Max to Elco Holdings Ltd. (TASE: ELCO), controlled by brothers Daniel and Michael Salkind.
Apax claims that Elco Holdings has breached the conditions that it should pay the full amount that it bid for Globus Max, NIS 144 million, and waive any claims against Globus Max's trustees. Apax is demanding that the chain should be sold to it at the price that it bid, NIS 143 million, or that there should be a fresh pricing process.
This follows Elco's notice to the trustees that it is demanding a reduction in the deal price after two studios (one of which is Warner Brothers) that are considered the lion's share of the company's distribution activity announced that they were terminating their contracts, asserting that change in ownership of the company constituted grounds for cancellation under the contract terms.
The sale of Globus Max was approved after four months during which the company traded under a stay of proceedings.
Boaz Barzilay CPA, one of the Globus Max trustees, said in response, "On Wednesday, Elco is due to pay the full consideration to which it committed. The consideration will be paid in full with no offset or reduction. The trustees rejected Elco's request to discuss a reduction in the consideration because of the distribution agreement cancellations. The distribution agreements were cancelled by the studios in accordance with the terms of those agreements which were known to the participants in the bidding for Globus Max. The trustees insisted that Elco should pay the full consideration as a condition for closing the sale."
Barzilay added that the trustees would not distribute the sale proceeds immediately to Globus Max's creditors, and that Elco would have four months in which to file any claim or demand.
Elco did not respond to the report.
Published by Globes [online], Israel business news - www.globes-online.com - on October 30, 2017
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