The board of directors of IDB Holding notified the Tel Aviv Stock Exchange this morning that it will cease to support the bid for the company by the Nochi Dankner-Alexander Granovsky consortium. "Although the position of the company's board of directors is that the formulation and submission of the settlement proposal by the company and the consortium of investors was beneficial to the company and its creditors, the company will not continue to bear the expenses involves in promoting the proposal," the announcement said.
Last week, the trustees of IDB Holding's bonds wrote to the company's board demanding that "no further financial outlay should be made from IDB Holding's cash and no use should be made of the company's resources to promote the bid by the investors and to finance legal proceedings the purpose of which is to continue to promote the investors' bid in preference to the settlement proposal that was approved, including by means of an appeal against the decision by the District Court."
The trustees further demanded that the board "should immediately repay all the amounts spent to date from the company's cash in connection with the investors' proposal," pointing out that unless this is done, all the directors will be personally exposed to lawsuits.
These development follow last week's decision by the Tel Aviv District Court to approve the joint bid for the company made by Moti Ben-Moshe and Eduardo Elsztain that was chosen by the company's bondholders. In rejecting the Dankner-Granovsky bid, Judge Eitan Orenstin stressed that he did not see their proposal as one made on behalf of the company itself, but as a proposal by a consortium of investors among whom happened to be the current controlling shareholder.
Published by Globes [online], Israel business news - www.globes-online.com - on December 22, 2013
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