The IDB Holding Corp. Ltd. (TASE:IDBH) takeover saga continues: Ukrainian-Jewish investor Alexander Granovsky, who intends to inject NIS 826 million into IDB through his takeover of Emblaze Ltd. (LSE: BLZ) via BGI Investments (1961) Ltd. (TASE: BGI), is offering BGI bondholders a personal guarantee, and to transfer the options for acquiring Emblaze shares from BGI to Chabad 770 BV, through which he controls BGI.
With this proposal, Granovsky is trying to calm the BGI bondholders, and prevent them from demanding immediate repayment of the bond, which would empty BGI's cash reserves, and jeopardize the capital injection into IDB. The big question is whether the proposal will satisfy BGI's bondholders.
In exchange for transferring the options from BGI to Chabad 770, Chabad 770 will pay BGI $1 million. This is the amount that BGI paid Fortissimo Capital and Emblaze chairman Naftali Shani to acquire the call option. BGI also promised not carry out any deal related to the acquisition of Emblaze shares for 21 days, except to buy back bonds.
The Tel Aviv Stock Exchange (TASE) suspended trading in BGI's shares on Monday, after the latter said it would make an important announcement. BGI's bondholders have already announced that they oppose the proposed deal between IDB controlling shareholder Nochi Dankner and BGI controlling shareholder Granovsky, and that they intended to demand immediate repayment of the bond.
Published by Globes [online], Israel business news - www.globes-online.com - on August 20, 2013
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