Antitrust Authority director general David Gilo may disallow the merger of Delek Automotive Systems Ltd. (TASE: DLEA) and Kamor Motors Ltd. (TASE: KMRS). In a notice to the TASE today, Delek Auto said, "At a meeting last night between the regulator and representatives of the companies, the Antitrust Authority director expressed concerns about the possible effects on competition by the company's merger with Kamor. The company responded to the regulator's arguments and he is expected to make a decision within a few days."
Following the announcement, Delek Auto's share price rose 0.4% in morning trading to NIS 28.05, giving a market cap of NIS 2.6 billion, but Kamor Motors' share price plummeted 35% to NIS 12.09, giving a market cap of NIS 150 million.
In late, July Ford and Mazda importer Delek Auto announced that it would acquire BMW importer Kamor Motors for NIS 253 million. Kamor Ltd. (TASE: KMOR), which owns 64% of Kamor Motors, would see a capital gain of NIS 162.5 million on the sale. The deal set a price of NIS 20 per share for Kamor Motors, a 30% premium on its share price at the time.
Published by Globes [online], Israel business news - www.globes-online.com - on October 27, 2011
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