Nochi Dankner-controlled IDB Holding Corp. Ltd. (TASE:IDBH) unit Discount Investment Corporation (TASE: DISI) is considering publishing an offer to purchase for 5-7% of the voting rights in subsidiary Shufersal Ltd. (TASE:SAE;Pink Sheets: SSLTF). Shufersal is Israel's largest supermarket chain, controlling 40% of the market.
The deadline for responses to the offer to purchase will be January 2010. Discount Investment has not yet decided on the exact terms of the offer to purchase. Discount Investment currently owns 38% of Shufersal and has 42.12% of voting rights.
Discount Investment books its Shufersal stake at a value of NIS 591 million, compared with its current value of NIS 1.23 billion.
In a separate announcement, Discount Investment said that a wholly-owned US subsidiary PEC Israel Economic Corporation was in talks with the US and Israel tax authorities to amend PEC's residency for tax purposes from dual residency to an exclusive Israeli residency. This change, if approved by the two countries' tax authorities, will result in a one-time tax charge in the US of $30 million for Discount Investment. Discount Investment cautions that it does not yet know if any other financial and other issues might apply, or their amount. Discount Investment added that, in the long term, the change will reduce its tax liability in the future.
Discount Investment's share rose 1.1% in morning trading today to NIS 95.76, giving a market cap of NIS 8.1 billion. Shufersal's share rose 2.4% to NIS 19.45, giving a market cap of NIS 4.1 billion.
Published by Globes [online], Israel business news - www.globes-online.com - on November 18, 2009
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