Businessman Moti Ben-Moshe announced last night to the management of IDB Development Corp. (TASE: IDBD) that he would not be realizing the rights, which he will receive today, in the company's rights issue. Ben-Moshe has already explained in the past that the path IDB is taking does not solve the fundamental problems of either the company or its subsidiaries, and that he would not be participating in the rights issue.
Even so, as part of the agreement on controlling the company between him and Eduardo Elsztain, he will retain the right to purchase half of the shares that the Argentinean is expected to buy in the rights issue.
After the rights issue today, Ben-Moshe's holding will be diluted to 11-16%, from 31%, but he will retain a position that will allow him to implement measures within the company.
The IDB Development rights issue was given the green light yesterday, after Tel Aviv District Court Judge Eitan Orenstin dismissed all demands to delay the issue. During trading today, it will be possible to purchase shares and options, and those purchases will actually take effect on Tuesday.
The rights issue is meant to inject NIS 806 million into the coffers of IDB, which currently has a market cap of just NIS 390 million. Elsztain has already said that he would buy half the shares on offer, putting up to NIS 400 million into the company.
The argument over the rights issue is part of a struggle between Ben-Moshe and Elsztain to control the company. Market sources believe that there is a high likelihood that the rights issue will succeed.
Published by Globes [online], Israel business news - www.globes-online.com - on February 5, 2015
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