On Friday, in Buenos Aires, Nochi Dankner and Eduardo Elsztain signed a deal whereby Elsztain will inject $25 million into Ganden, the private company through which Dankner controls IDB Holding Corp. Ltd. (TASE:IDBH), in exchange for 10% of the company. Elsztain also has an option to raise his stake in the company to 30% for a further $75 million.
According to IDB's notice to the Tel Aviv Stock Exchange, under the terms of the deal, if Elsztain exercises his option, material decisions in Ganden will be subject to agreement between him and Dankner. Elsztain will also have the right to recommend one director for the Ganden board.
The notice also states that Dankner will recommend to the IDB board a move to inject NIS 35 million into the company in order to meet payments to holders of its 'B' series bond. It further states that various negotiations are taking place for further investment in Ganden and IDB, but that there is no certainty that these negotiations will mature into transactions.
"Dankner will do everything to avoid a haircut for investors," a source close to IDB told "Globes", "He will introduce investors even if it means diluting his holdings in the group." On the possibility of a sale of one of the subsidiaries, the source said, "This is not an ideal time for a sale, and every deal has to be examined extremely carefully. This is a period of weakness on the capital market."
Published by Globes [online], Israel business news - www.globes-online.com - on September 23, 2012
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