National-religious group to counterbid for Jerusalem project

Digal's Nof Zion is a luxury residential project located near the Armon Hanatziv Promenade.

"Globes" disclosure of the Palestinian identity of the expected buyer of Digal Investment and Holdings Ltd. (TASE: DIGL), through a debt settlement, has aroused a storm Israeli national-religious groups. Bemuna Ltd., owned by Israel Zeira, which develops neighborhoods for this community around the country, plans to submit an offer to purchase Digal's flagship residential project, Nof Zion, in eastern Jerusalem.

Nof Zion, a luxury project, located near Armon Hanatziv Promenade, is essentially Digal's only project.

Bemuna announced on its website that it plans to organize a buyers group "to save Nof Zion" and "stop the hostile takeover by Adv. Dov Weissglass". The buyers group will offer to buy the remaining land in the Nof Zion project, zoned for 180 apartments, for NIS 50 million, reflecting a price of NIS 275,000 per land per apartment.

Zeira told "Globes", "We want to keep the land in Israeli hands, and not have it sold to Palestinians".

Bemuna said, "The offer submitted by Adv. Dov Weissglass represents a Palestinian Arab, whose main wish in acquiring the company is to transfer the Nof Zion land from Jewish hands to Palestinian hands."

On Tuesday, Digal's bondholders chose an offer by a businessman represented by Weissglass, the former Prime Minister's Bureau director for Ariel Sharon, as the basis for the company's debt settlement. The businessman operates through a Cypriot registered company, Techsal Trading Ltd.; "Globes" found that the businessman is a Palestinian with a US passport. The offer chosen by Digal's bondholder includes a NIS 36 million cash payment at NIS 0.60 per NIS 1 par value bond. The buyer plans to convert the bonds into shares and delist Digal from the TASE.

"This is camouflage," Zeira said. "We want to buy the land through a new company set up for this purpose, and which will be fully owned by the investors through acquisition. Alternatively, we'll bid to buy the bonds instead of the present offer."

The minimum investment for a member of the buyers group is NIS 320,000 (the value of the land for an apartment in the project). Adv. Yitzhak Meron, who is organizing the buyers group, said that he has already contacted Digal with an offer.

Digal's share price fell 2% by early afternoon to NIS 0.68, giving a market cap of NIS 5 million.

Published by Globes [online], Israel business news - - on December 9, 2010

© Copyright of Globes Publisher Itonut (1983) Ltd. 2010

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