Eduardo Elsztain is expected to improve once again his offer for the controlling stake in Discount Investment, in an effort to persuade the company's receivers and creditors of IDB Development, which owns the stake, to choose his bid. After negotiations that lasted until midnight, Elsztain is due to publish a revised offer in advance of this afternoon's consultative meeting of IDB Development's bondholders.
A few days ago, Elsztain offered NIS 1.028 billion for the 70% of Discount Investment mortgaged to its 14 Series bondholders, and deposited a NIS 154.3 million guarantee. Elsztain also offered the IDB Development trustee a put option on the remaining 12% of Discount Investment held by IDB Development, exercisable two years after completion of the deal.
Sources inform "Globes" that Elsztain will raise the guarantee by NIS 23 million to NIS 177.3 million and will also raise the amount payable on exercise of the option on the additional shares from NIS 85 million to NIS 126 million. In addition, the 14 Series bondholders will also be given the choice of receiving 18% of the shares in Discount Investment in exchange for a reduction in the consideration payable for the controlling stake.
There has been no response to Elsztain's raised bids from the investor group led by Mega Or (TASE: MGOR). The third bidder, Moshe Sabah, raised his bid to NIS 1.3 billion for 82% of Discount Investment and sought to transfer NIS 195 million to the court to cover the guarantee required by the receivers.
The IDB Development bondholders will meet today (Monday) to discuss the three offers on the table, and tomorrow (Tuesday), the holders of each bond series will vote for the offer they prefer and submit it for court approval.
Published by Globes, Israel business news - en.globes.co.il - on November 9, 2020
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