Sources inform ''Globes'' that plant propagation company Rahan Meristem Ltd., owned by Kibbutz Rosh Hanikra, has petitioned the Tel Aviv District Court to appoint an arbitrator in its dispute with Markstone Capital Partners Group LLC for allegedly not fulfilling an investment agreement between the private equity fund and the company.
Rahan Meristem develops improved varieties of fruit trees, mostly avocado. The company claims that, in April 2008, it signed a memorandum of understanding (MOU) with Markstone to acquire 80% of the company for NIS 22 million, but that Markstone never signed a final contract.
Rahan Meristem CEO On Barzilai told "Globes", "Markstone summoned me and chairman Yonatan Melamed and told that the due diligence was okay and that they wanted to sign. The draft agreement was prepared, but then the chaos with Prisma began (Markstone's investment house that crashed - A.S.), and they told us, 'Sorry, but there's been a change in the global climate and we won't make the acquisition'."
Barzilai added, "We want compensation, because the cancellation of the deal has affected our ability to find a new investor, and with the compensation they offered us we might be able to acquire Tel Aviv Peanuts. They prefer to go to court, because it could drag on for 10 years, and who knows with whom we'll talk to then. We tried to reason with them, but they're apparently thugs at the company."
Markstone said in response, "This is an attempt at extortion wrapped in groundless claims. Rahan Meristem is fully aware that the agreement explicitly states that Markstone has the right to cancel the agreement for any reason after the due diligence conduction on the company. And indeed, after Markstone's experts completed the due diligence, they decided to cancel the agreement with Rahan, and so it was."
Rahan Meristem was founded in 1974 and has been profitable since 2003. It has 140 employees at its plant in Israel and 180 employees at its subsidiaries in Colombia, Ecuador, and Costa Rica. The company is considered a global leader in banana seedlings.
Published by Globes [online], Israel business news - www.globes-online.com - on June 14, 2011
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