GMM Capital seeks to tighten control of Delta Galil

The company made a tender offer to buy 4.9% of the textile company's shares.

GMM Capital LLC, an investment fund owned by the Dabah family, has made an offer to buy 4.97% of the shares of and 5.34% of the voting in Delta Galil Industries Ltd. (Bulletin Board: DELTY; TASE: DELT). Isaac Dabah acquired the 42.1% controlling interest in the textiles manufacturer last year from its founder, Dov Lautman.

GMM offered to buy one million Delta Galil shares at NIS 21.32 per share, a 20% premium on yesterday's closing price. The offer to purchase is valid through June 10, and is subject to a response by at least 5% of the company's voting rights, i.e. 937,100 shares. If the offer is successful, GMM will own 44.15% of Delta Galil and 47.39% of the voting rights (43.08% fully diluted). Dabah, through GMM, first invested in the company three years ago. He has 26 years of experience in the textiles and clothing industry.

GMM also owns half of the US retail chain Goody's Family Clothing Inc. (Nasdaq: GDYS).

Delta Galil lost $12.5 million in 2007. The company is now restructuring, including layoffs and transferring production from Israel to Jordan and Egypt and from China to Thailand. The restructuring costs total $11 million. Delta delisted from Nasdaq at the end of March, and transferred trading in its American Depositary Shares (ADS) to the Bulletin Board.

Published by Globes [online], Israel business news - www.globes-online.com - on May 12, 2008

© Copyright of Globes Publisher Itonut (1983) Ltd. 2008

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