Delek Group Ltd. (TASE: DLEKG), controlled by Yitzhak Tshuva, is considering acquiring UK motorway services areas Roadchef from Delek Real Estate Ltd. (TASE: DLKR, also controlled by Tshuva, after he acquired Delek Group's controlling interest in the company a couple of years ago.
Delek Group would not pay cash for Roadchef, but write off a NIS 350 million loan granted to Delek Real Estate, which gave Delek Group a lien on 24% of shares in foreign subsidiaries that own Roadchef as collateral.
Delek Group raised the possibility of acquiring Roadchef in the past. In its financial report for the second quarter, published on August 31, Delek Group wrote, "We are examining the possibility of another alternative of acquiring Roadchef by Delek Group, offsetting the balance of loans."
The loan referred to is a NIS 353 million loan by Delek Group to Delek Real Estate. Repayment of the loan was postponed from July 2009 to December 2010 when Delek Real Estate was unable to meet its obligations. Delek Real Estate had a working capital deficit of NIS 2.9 billion at the end of June 2010.
Apparently, negotiations have made progress since then, leading to today's notice to the Tel Aviv Stock Exchange (TASE).
In today's notice to the TASE, Delek Group did not disclose the company value, which it would acquire Roadchef, but market sources believe that if a deal is closed, it will be at the value Roadchef is listed in Delek Real Estate's books: ₤120 million (about NIS 684 million)
In its financial report for the second quarter, Delek Real Estate listed its expected sources of revenue over the coming year, one of which was NIS 346 million from the sale of Roadchef.
Delek Real Estate and wholly-owned Delek Group subsidiary Delek Petroleum Ltd. (TASE: DLKP.B7; DLKP.B8) acquired Roadchef for ₤158 million in 2007. Delek Real Estate's portion was ₤120 million (about 76%).
Delek Real Estate owes about ₤180 million to banks.
Delek Group's share price rose 0.5% in morning trading to NIS 1,006, giving a market cap of NIS 11.5 billion. Delek Real Estate's share price rose 8.4% to NIS 1.82, giving a market cap of NIS 550 million.
Published by Globes [online], Israel business news - www.globes-online.com - on November 1, 2010
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