Strauss Group Ltd. (TASE:STRS), controlled by businesswoman Ofra Strauss, today began a lightening share offering for investment institutions. The company needs NIS 330 million in order to complete its acquisition of full ownership of Strauss Coffee, and unexpectedly decided to begin the offering today.
Strauss recently announced a deal to acquire full ownership of Strauss Coffee. The company needs €257 million for the acquisition. An initial payment of €172 million was paid with a short-term loan obtained by the company, which now needs €85 million to complete the deal and NIS 200 million more to convert the short-term loan into one of longer duration.
Strauss had two options: issuing bonds and issuing shares. Strauss's current credit rating is an excellent AA+, but the company risks having its credit rating downgraded to AA, so it chose to finance the deal by issuing shares, resulting in the offering that began today.
The tender is taking place at a an effective minimum price of NIS 63 per share, reflecting a 3% discount on the market price. Senior capital market sources told "Globes" that the demand for the shares issued had been stronger than expected, which is likely to help the company raise the full amount sought for completion of the Strauss Coffee deal.
In the early closed sale for investment institutions, demand poured in, and shares were sold for NIS 200 million. A lightening tender to raise the balance of the required sum was later held for investment institutions that did not take part in the earlier tender.
Published by Globes [online], Israel Business News - www.globes-online.com - on April 4, 2017
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