Out of the game - businessman Meir Gurvitz has announced that he is dropping out of the race for control of El Al Israel Airlines Ltd. (TASE: ELAL). "In the circumstances that have arisen, and in the light of the opposition of the Ministry of Finance to a private placement, I have no intention of entering into a deal for the purchase of control of airline El Al," Gurvitz said in a statement.
In his statement, Gurvitz wishes El Al well, as an interesting company with great potential for enhancing its value, and adds that he sought joint control with El Al's parent company Knafaim, but that "in the light of the conditions that have recently come about, I have decided, at this stage, not to proceed with the deal."
El Al is due to make a $150 million public equity offering by September 17, i.e. this Thursday. A public prospectus is due to be released today. The outline of the offering approved by the government calls for a uniform offering, with the Ministry of Finance refusing to permit a private placement. After the offering, the state will give El Al a 75% guarantee for a loan of $250 million.
Gurvitz, whose business is in real estate, came to Israel for several meetings to promote his ambition to acquire control of El Al. It now remains to be seen whether David Sapir, who is also bidding for control of the airline, will continue with his bid even after it has become clear that El Al will not be able to make a private placement as he wanted.
The other bidder is Eli Rozenberg, who is waiting for the public offering in the hope of acquiring control of the company.
Published by Globes, Israel business news - en.globes.co.il - on September 15, 2020
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