Just a few days after joining the IDB group in an official capacity as deputy chairman, and a few hours after the IDB Holding Corp. Ltd. (TASE:IDBH) bondholders voted to wrest control of the group from chairman and controlling shareholder Nochi Dankner, Argentinian businessman Eduardo Elsztain has decided that he will not invest the $75 million that he was supposed to transfer to the group as a follow up to the $25 million investment he made in Ganden (the private company through which Dankner controls IDB) last year.

IDB sources explained that Elsztain will not exercise his option because of the prolongation of the negotiations with the bondholders, the difficulties in the negotiations, and the tight timetable for dealing with the matter. The bondholders' vote is not the last word from a legal point of view, but it indicates a clear direction that events are likely to take.

Sources close to the matter say however that Nochi Dankner has not yet given up. They say that he anticipated the possibility that Elsztain would not exercise the option, and so made efforts to bring in other investors, both Israeli and foreign. According to the sources, these other investors will help to form an alternative framework for discussions with the creditors and for a debt arrangement in the group, and to that end will transfer cash to a trustee account in Israel next week.

On Wednesday, the IDB Holding bondholders voted by a majority of 90% to take control of the company away from Dankner.

Published by Globes [online], Israel business news - www.globes-online.com - on July 5, 2013

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