Paz Oil Company Ltd. is in advanced negotiations with Israel Corp. (TASE: ILCO) to become a partner in Oil Refineries Ashdod. Controlled by Ofer Brothers, Israel Corp. is expected to notify the Tel Aviv Stock Exchange (TASE) today about significant progress in its negotiations with Paz.
Israel Corp. will reportedly become Paz’s strategic partner. “Globes” first reported the negotiations between the companies while Paz was participating in the tender to acquire Oil Refineries Ashdod. Following Paz’s acquisition of Oil Refineries Ashdod for $800 million yesterday, its negotiations with Israel Corp. are now expected to make substantial progress.
The company apparently has to raise its shareholders’ equity to obtain financing for its bid in the Oil Refineries Ashdod tender.
Zadik Bino currently controls Paz with a 51% stake; Bank Leumi (TASE: LUMI) owns 19%; the Liberman family 20%; and Paz CEO Mordechai (Modi) Ben-Shach owns 7%. Following its win in the tender, Paz is considering merging with Oil Refineries Ashdod and floating the company.
Bino told “Globes” today, “Many companies have approached Paz to express an interest in forming a partnership. We’ve also contacted companies that might be interested in Oil Refineries Ashdod. There’s nothing concrete at the moment, it’s only talk. Israel Corp. is, however, a worthy partner.”
Government Companies Authority director Eyal Gabbai recently notified the four participants in the Oil Refineries Ashdod tender - Paz, Sonol Israel Ltd,, Delek Group Ltd. (TASE: DLEKG), and Dor Alon Energy in Israel (1988) Ltd. (TASE:DRAL) - that the state must explicitly approve any changes in the ownership structure, control or holdings.
Update 18:45: Israel Corp. has confirmed that it is talks with Paz on possible partnership in Oil Refineries Ashdod.
Published by Globes [online], Israel business news - www.globes.co.il - on August 1, 2006
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