Tnuva Food Industries Ltd., controlled by Apax Partners, is due to distribute a huge dividend of NIS 800 million to NIS 1 billion in the first quarter of 2011. The dividend is supposed to enable the buyers of Mivtach Shamir Holdings Ltd's (TASE:MISH) stake in Tnuva to get back part of their investment. It will also enable Apax to improve its internal rate of return (IRR) on the investment.
The latest dividend will bring the dividends Tnuva has distributed since its takeover by Apax and Mivtach Shamir to NIS 1.5 billion. The dividends mean that Apax will get back half of its investment in Tnuva within three years.
Tnuva spokeswoman Alona Arieli Lahav declined to comment on the report.
Bank Leumi (TASE: LUMI), which bought Mivtach Shamir's shares in Tnuva, will receive a dividend of NIS 80-100 million, amounting to about 15% of its investment in the company. Since the bank cannot recognize its holding on an equity basis or recognize the profit, Leumi and Apax have unofficially agreed on a dividend policy for Tnuva, which will enable the bank to show high current profits from the holding.
Mivtach Shamir owned 20.7% of Tnuva. Bank Leumi will buy half of the stake, and will find buyers for the other half.
Published by Globes [online], Israel business news - www.globes-online.com - on November 18, 2010
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