Sources inform ''Globes'' that two Israeli insurance companies recently contacted Granite Hacarmel Investments Ltd. (TASE: GRNT), controlled by Oded (Dedi) Borovich, to acquire 10% of the company. The parties are reportedly conducting negotiations at a company value of $300 million for Granite Hacarmel, on the basis of valuation for Copper River Partners LLC’s recent investment in the company. This price tag reflects a 50% of Granite Hacarmel’s current market cap.
Sources also inform ''Globes'' that the anticipated approval of the Dor Alon Energy in Israel (1988) Ltd. (TASE:DRAL)-Sonol Israel Ltd, merger has renewed interest in Granite Hacarmel among additional investors, who were interested in acquiring a stake in the company at a value of $350 million.
Borovich declined to comment on the report, saying he had no plans at this time to sell the controlling interest in Granite Hacarmel, even at a price tag of more than $300 million.
The renewed interest in Granite Hacarmel is due to the expected sale of Sonol, after the Restrictive Trade Practices Tribunal approved its merger with Dor Alon. The sale is expected to lead to a major change in Granite Hacarmel’s capital structure. The company has suffered from heavy financing costs on its large debt in recent years. The company’s shareholder’s equity is expected to grow by $200 million when the Sonol sale is closed, and its cash reserves are expected to grow by the same amount.
After selling Sonol, Granite Hacarmel will own stakes in Tambour Ltd. (TASE:TMBU), Super Gas Ltd., and Tambour Ecology Ltd., which is due to go public in the medium term. Granite Hacarmel also owns a number of real estate properties and a stake in Nitsba Holdings Ltd. (TASE: NTBA).
In addition to the change in Granite Hacarmel’s business, the company’s ownership structure has also changed recently.
Granite Hacarmel adds that Sonol CEO Joseph (Yossi) Antverg will stay at his post at least until the sale of Sonol to Dor Alon is completed. Granite Hacarmel today denied yesterday’s report in “Globes” that Antverg would leave the company. However, it should be stressed that he has no plans to stay in the merged company after the sale. He will stay on as CEO of Sonol and ensure a smooth change in ownership. Dor Alon general manager Israel Yaniv is expected to take over the management of the newly merged company.
Industry sources said today, “No one knows when the deal will be completed. The merged company will probably initially be run as two separate businesses, and Antverg’s presence is significant.”
Published by Globes [online], Israel business news - www.globes.co.il - on April 11, 2006
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