IDB Holding Corp. Ltd. (TASE:IDBH), controlled by chairman Nochi Dankner, has sold 50% of subsidiary Clal Industries and Investments Ltd. (TASE: CII) to Access Industries Inc., controlled by Len Blavatnik of the US, at a value NIS 2.55 billion. The sale reflects a 41% premium on Clal Industries' market cap of NIS 1.8 billion.
IDB Holding currently owns 60.5% of Clal Industries. Blavatnik is acquiring 49.9% of the company, and has an option to buy the rest of IDB's stake. The shares were sold at NIS 16.19 per share, 42% above Thursday's closing price of NIS 11.43, and 15.6% above the average closing price of the past three months. If Blavatnik buys 49.9% of Clal Industries, the proceeds will total NIS 1.27 billion, and he buys the entire stake, the proceeds will total NIS 1.54 billion.
IDB added that it expects to report a capital gain of NIS 325 million on the sale, or NIS 400 million, if Blavatnik buys the entire stake.
Clal Industries' net profit rose to NIS 322 million for the fourth quarter of 2011 from NIS 282 million for the corresponding quarter of 2010, and its full-year profit rose to NIS 585 million in 2011 from NIS 410 million in 2010.
Clal Industries' fourth quarter results were due to the sale of its 68.5% stake in Fundtech Ltd. to GTCR Fund for $205 million (valuing Fundtech at $390 million) in November 2011. Clal Industries reported a capital gain of NIS 428 million on the sale.
Clal Industries' assets totaled NIS 11.5 billion at the end of 2011, down from NIS 12 billion a year earlier. Its shareholders' equity was NIS 2.4 billion at the end of 2011, and it had NIS 1.1 billion in cash, up from NIS 375 million at the end of 2010.
Yesterday, Dankner told "Channel 2 News", "There was never a discussion, meeting, or conversation between me any executive at IDB about a debt settlement, haircut, combing, or anything of the sort. At IDB, we have sufficient liquidity to service the bond debt for at least 18-24 months, and, in my opinion, the market is valuing us incorrectly. We're stronger than any current image or media line. I don’t want to advise investors that's not my job but I am personally buying shares in IDB Holding."
Dankner added, "I am in good shape, even now. We're not going through hard times, but challenging times. Why? Because hard times are when you're passive, and challenging times are when you have to take action at your own initiative, and that's what we're doing."
IDB Holding's share price rose 6.5% in early trading on the TASE to NIS 19.90, giving a market cap of NIS 920 million, and Clal Industries' share price rose 5% to NIS 12.
Published by Globes [online], Israel business news - www.globes-online.com - on May 20, 2012
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