DS Apex Holdings Ltd. (TASE:DSAP) and Meitav Investment House Ltd. are in merger talks. The two companies' boards of directors will meet tomorrow to discuss the matter. A merger would create an investment house with more than NIS 100 billion in assets under management. Sources inform ''Globes'' that the value of the merged company is NIS 1.5 billion.
DS Apex is controlled by Eli Barkat. Meitav is owned by the Stepak family and Shlomo Simanovsky, with a 50.1% stake, Direct Insurance - Financial Investments Ltd. (TASE: DIFI) with 28.5%, and B. Gaon Holdings Ltd. (TASE: GAON), with 21.4%.
The sources added that, the merger would be through a share swap, and that DS Apex will return 55% of the merged company. DS Apex will distribute a NIS 190 million dividend, reducing its valuation, after which it will merge with Meitav. As part of the deal, the Stepak family will acquire half of Gaon Holdings' stake in Meitav, Simanovsky's stake, and part of Barkat's stake, in order to reach an equal holding in the merged company. of Meitav's smaller shareholders, probably Gaon Holdings, will sell its stake. Meitav managing director Ilan Raviv would head the merged company. The role of DS Apex CEO Yadin Antebi in the merged company is not clear.
DS Apex is Israel's second largest independent investment house (i.e. not owned by an insurance company), with NIS 60 billion in assets under management. These include NIS 23 billion in provident funds, and NIS 17 billion in exchange traded funds (ETFs). In January 2010, it acquired BRM Capital, run by Eli Barkat, at a value of NIS 500 million. Barkat owns 57% of DS Apex.
Meitav is Israel's third largest independent investment house, with NIS 43 billion in assets under management. It was created three years ago through the merger of Meitav, Yashir Investment House, and Gaon Capital Markets. Previous valuations for the company estimate its value at NIS 800-900 million. However, it is clear that in view of the crisis, heavy regulations, and the future capping of management fees for provident funds, mean that this valuation is no longer realistic. The distribution of shares between the parties will therefore be at the center of negotiations.
The merged company will manage NIS 25 billion in mutual funds and NIS 35 billion in provident funds, making it the second largest manager of provident funds. Regulatory problems are likely over the ETFs, and will require approval of Antitrust Authority director general David Gilo, since the merged company's ETFs will have NIS 35 billion in assets under management and a 45% market share.
DS Apex's share price rose 0.9% today to NIS 14.14, giving a market cap of NIS 538 million.
Published by Globes [online], Israel business news - www.globes-online.com - on March 19, 2012
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