Sources inform ''Globes'' that Formula Systems (Nasdaq: FORTY) controlling shareholder Dan Goldstein is in advanced negotiations to acquire control of the Liraz group. Goldstein will probably carry out the transaction through Formula Systems. The main shareholders in the Liraz group are Discount Investments (42%) and Arik Kilman (17.4%).
Goldstein will buy 51% of the Liraz group. The main sellers will be Discount Investment Corporation, which will sell most of its stake, and Kilman, who will sell 9% of his. The deal will be carried out at a price of NIS 10 per share, a 50% premium over Liraz's NIS 6.66 price on the Tel Aviv Stock Exchange today, and reflecting a market value of $16 million.
Until recently Liraz's main holding was its 31% stake in US software company Level 8 Systems (Nasdaq: LVEL). Earlier this month, Liraz announced it was acquiring Level 8’s AppBuilder technology for $20 million. Level 8 will use $12 million from the proceeds to repay loans the Liraz group guaranteed for the company.
The Liraz group lost NIS 33 million in the second quarter, after losing NIS 28 million in the first. Most of the loss was due to the Liraz group's stake in Level 8.
Goldstein said in response that Formula Systems was interested in acquiring control of three or four companies, including the Liraz group, but nothing had been closed at this stage.
Published by Israel's Business Arena on 29 August 2001
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