The Government Companies Authority will publish this week a call for investors to submit their candidacy for the acquisition of Israel Military Industries Ltd. (IMI), as part of the plan for privatizing government defense companies. The summons for investors, which is expected to appear in the Israeli and foreign press, reflected progress in the plan to privatize IMI, which currently employs 2,700 workers.
As part of the IMI privatization plan, particulars of individual investors or groups answering the summons will be checked by the Ministry of Defense official in charge of security in an effort by the defense establishment to protect the defense company's essential interests. Potential investors who pass the security check and the preliminary selection by the Ministry of Defense will be allowed to progress in the proceedings for making money bids to acquire the company, after its confidential financial data are disclosed in the information rooms that IMI and the Government Companies Authority will open three months from now.
The Ministry of Defense and the Government Companies Authority have ruled that the only Israelis and Israeli companies can participate in the procedures for the sale of the company. At the same time, foreign investors and companies can also compete for the acquisition of IMI if an Israeli company with the core of its activity in Israeli is involved. In the past, the IMI workers committee expressed dissatisfaction with the plan to allow foreign investors to compete for the acquisition of the company, claiming that they were likely to resell the company, as British company Apax Partners did after acquiring Tnuva Food Industries Ltd., when it sold the food concern to Chinese company Bright Foods.
Elbit Systems Ltd. (Nasdaq: ESLT; TASE: ESLT) officials, who are showing interest in the acquisition of IMI, also previously expressed their unhappiness with the plan to allow foreign parties to compete for the acquisition.
US investment bank Stifel Bank is leading the privatization process, after the Government Companies Authority contracted with the bank for the purpose of finding overseas investors and maximizing the state's profit on the sale of the IMI. According to past assessments, the state will be able to sell IMI for as much as NIS 2.5 billion. IMI chairman Maj.-Gen. (res.) Udi Adam and CEO Avi Felder have previously predicted that IMI would operate as a private company by the end of 2015.
Published by Globes [online], Israel business news - www.globes-online.com - on March 1, 2015
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