The Buy Me Buy You (BMBY) procedure for the controlling interest in IDB Development Corporation Ltd. (TASE:IDBD) will not be over in two days; it is likely to continue for weeks, according to an answer sent today by Moti Ben-Moshe to Eduardo Elsztain, his former partner. In his letter, Ben-Moshe states that he is refusing Elsztain's most recent demand that Ben-Moshe should finish transferring his shares to Elsztain by Thursday.
Ben-Moshe was answering Elsztain's letter of two days ago, in which he demanded the completion of the BMBY process between them. Elsztain regards himself as having given Ben-Moshe timely notice of his consent to the process, and as therefore being entitled to buy his former partner's IDB Development shares (14% of the total) at NIS 1.64 a share, making a total price of NIS 152 million.
Ben-Moshe's letter, however, refuses Elsztain's demand, and reiterates his assertion that he himself is the one doing the buying in the BMBY procedure, since Elsztain's notice did not conform to the conditions stipulated for utilizing the legal mechanism for consensual separation between controlling shareholders.
The dispute between the parties concerns the obligation of the controlling shareholders to buy shares from the eligible parties in the IDB Holdings debt arrangement for NIS 512 million. Ben-Moshe made his consent to the BMBY procedure conditional on the buyer also assuming the seller's obligations to the creditors, but Elsztain opposed this.
Given this dispute, Ben-Moshe's lawyers write, "There was no avoiding a request to the arbitrator (Judge (ret.) Amiram Benyamini, O.C.) for an immediate hearing on the BMBY procedure, and he agreed. As your client is well aware, at last week's arbitration meeting, his honor the arbitrator decided to split the arbitration into two stages, with the first stage being a hearing of the dispute on the BMBY procedure, which will decide the question of who the buyer is and whether the buyer is responsible for both parties' obligation (with respect to relations between the parties).
"As your client is also well aware, the timetables set for this part of the arbitration end before the summary arguments are submitted is the second half of July of this year, and a ruling on the BMBY is expected only after that." It should be pointed out that although the legal procedure has not yet finished, Elsztain, who owns 68% of IDB, is actually the sole controlling shareholder in the company as of now.
The IDB Development shareholders meeting will convene in two weeks for re-election of the board of directors representing the controlling shareholders. Elsztain is expected to vote for his six candidates, while removing Ben-Moshe and his two directors (Yaniv Rog and Oded Najar) from the board.
Published by Globes [online], Israel business news - www.globes-online.com - on June 23, 2015
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