The deal for the sale of Psagot Investment House Ltd. has broken down. Representatives of the Apax fund, the buyer in the deal, failed to turn up for the scheduled closing at 16:00 today. They sent a message to York Capital Management, which controls Psagot, that it had 30 days to correct "the violations", otherwise there would be no deal. York Capital, represented in Israel by managing director Jeremy Blank, has announced that it does not intend to extend the final deadline.
Sources close to the negotiations told "Globes" that "York's obstinacy in not extending the deadline is childish and unreasonable. It seems our ways have parted."
As far as Apax, headed by Zehavit Cohen, is concerned, York Capital violated the agreement, and the transaction cannot be completed because Psagot is under criminal investigation, and there is a real threat to its ability to function as a licensed investment house. Apax has informed York that it will be happy to complete the deal if the violations are remedied.
The deal has broken down despite that fact that it appears that the State Attorney's Office will disarm the main bomb threatening the completion of the investment house to Apax. The State Attorney's Office is inclined not to indict the investment house in the bond price manipulation affair, and to make do with a fine of some NIS 150 million, though it seems it will indict the individuals involved. At any rate, no such arrangement has yet been signed, and until it is, there will not be a deal.
More than six months ago, the parties signed on the original outline for the deal, whereby which Apax was to have acquired 76% of the investment house for NIS 2.36 billion, a price that values Psagot at NIS 3.1 billion. Apax was expected to receive a discount of 10% on the original price, so that it would have paid NIS 2.1 billion for control of Psagot, at a valuation of NIS 2.8 billion.
Published by Globes [online], Israel business news - www.globes-online.com - on October 13, 2010
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