Medtechnica Ltd. (TASE: MEDI) CEO Israel Tauber announced that he will exercise his option to sell the entire 14% stake in the medical device company, which he owns in almost equal shares with his brother, Ram Tauber, to Ilex Medical Ltd. (TASE:ILX). The sale is part of Ilex's acquisition of the company.
Last week, Ilex announced the acquisition of 39% of Medtechnica from Eldav Investment Ltd. (TASE: ELDAV-L) at a company value of NIS 475 million.
Israel and Ram Tauber, scions of Medtechnica's founders, will receive NIS 67 million for their shares. They have already made more than NIS 100 million from the company since 2003, including NIS 21 million in dividends since Eldav acquired the controlling interest in the company three years ago.
Tauber received tag-along rights to any sale of Medtechnica by Eldav. His exercising the option is a surprise, given that the company is his family's business. However, he will reportedly stay on as CEO at a higher pay after the sale to Ilex.
Tauber is apparently selling the shares because he is getting a good price, and on the assumption that Ilex, as a strategic investor, may hold on to Medtechnica for the long term. In other words, there will be no option for a similar deal anytime soon.
Israel Tauber rarely talks with the media, and declined to respond to the report.
The sale of shares by Israel and Ram Tauber will give Ilex a 53.1% controlling interest in Medtechnica, and could facilitate the financial and operation merger of the companies. The consolidated company will have a turnover of almost NIS 500 million, making it a major player in the Israeli medical devices market, although it will not be a monopoly, as the companies operate in differrent niche markets.
Medtechnica's share price fell 0.5% to NIS 27.72, giving a market cap of NIS 401 million. Ilex Medical's share price fell 0.4% to NIS 37.35, giving a market cap of NIS 376 million.
Published by Globes [online], Israel business news - www.globes-online.com - on January 24, 2011
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