The management of textile company Tefron Ltd. (Bulletin Board: TFRFF; TASE:TFR) can take a sigh of relief after a busy and tense yesterday. At a general meeting at the company's Petah Tikva offices, the company's shareholders approved the deal with Canada's Nouvelle Seamless Inc. 83% of Tefron's minority shareholders approved the sale of the controlling interest in the company to Nouvelle. In a separate development, shareholder Danny Magen withdrew his request to the court for an injunction against the deal.
The Central District Court heard Magen's claim that Mivtach Shamir Holdings Ltd. (TASE:MISH) had promised him to take Mivtach Shamir's place in Tefron's private placement that is part of the Nouvelle deal, but withdrew the offer. After the hearing, Magen withdrew his petition for an injunction against the deal.
Tefron's share price closed at $3.51 in New York yesterday. The share price rose 9.7% today on the TASE to NIS 13.95.
Tefron CEO Amit Meridor said, "Tefron is embarking on a new road. Approval of the deal by a crushing majority paves the way for completion of the recovery plan and ensuring the company's growth potential. We have a lot more work ahead of us, but we're on the right track."
Tefron is acquiring the seamless textiles assets of Nouvelle, including its customers list and work orders, in exchange for 9.6% of Tefron shares and an investment by Nouvelle through a private placement by Tefron at $2.10 per share. (Tefron's). Nouvelle's controlling shareholders, Ben and Martin Lieberman, also received 450,000 Tefron options, exercisable at $3 per share.
When the deal is completed, Nouvelle will own 30.1% of Tefron, Mivtach Shamir will own 12.3%, Rimon Investment Master Fund LP will own 11.9%, giving the three companies a 49% controlling interest in the company. Analyst IMS Investment Management Services Ltd. (TASE:ANLT) will own 3.2% (down from its current 6.2%), and Norfet LP (a joint venture of First Israel Mezzanine Investors Fund (FIMI) and Mivtach Shamir) will own 7.4%, down from its current 14.1%.
Tefron's float will fall from the current 69.8% to 35.1%.
Published by Globes [online], Israel business news - www.globes-online.com - on December 30, 2010
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