A group of investors headed by Leon Recanati is acquiring 63.5% of Gmul Investment Co. Ltd. (TASE: GMUL) from Marlaz - Shore Area Construction Property and Holding Ltd. for NIS 400 million, giving a company value of NIS 630 million. The transaction was made at a premium of 110% on Gmul’s current market cap of NIS 300 million, and almost 1.5 times its shareholders’ equity of NIS 427 million. Gmul’s share has fallen 35% since April.
Gmul is controlled by chairman Eyal Yona, Amnon Barzilai, and Eddie and Jules Trump of the US. Eyal Yona is the brother of Boaz Yona; however there is no business connection between Marlaz and Gmul, and Boaz Yona’s collapsed Heftsiba Building Development & Investments Ltd..
Gmul’s main asset is its liquidity. The company has NIS 802 million in cash and short-term investments, which new owners can use to make new investments. On the other hand, the company also has NIS 1.01 billion in liabilities to the banks, resulting in a net financial debt of NIS 200 million.
Under the agreement, Marlaz will continue to own 10% of Gmul, and will have a put option for the sale of this stake to the new owners under the same terms.
Published by Globes [online], Israel business news - www.globes.co.il - on September 2, 2007
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