Sources inform ''Globes'' that two of the biggest public shareholders in Delek Energy Systems Ltd. (TASE: DLEN) Psagot Investment House Ltd. (which holds 22% of the float) and Halman Aldubi Investment House Ltd. (which owns 8% of the float) have decided to accept the offer to purchase for Delek Energy. Their decision will greatly improve the chances of success that, this time, Delek Group Ltd. (TASE: DLEKG), will succeed in delisting the subsidiary. Other investment institutions have also reportedly decided to accept the offer.
The deadline to respond to the offer to purchase for Delek Energy expired at 2 pm today. This is the fourth offer to purchase published by Delek Group, controlled by Yitzhak Tshuva. Delek Energy controls Delek's oil and gas exploration partnerships Avner Oil and Gas LP (TASE: AVNR.L) and Delek Drilling LP (TASE: DEDR.L).
The public owns 13.3% of Delek Energy. For Delek Group's offer to purchase to succeed, it needs a favorable response by shareholders who own at least 8.3% of the company to reach the required 95% threshold. Psagot directly and indirectly through study funds, owns 3% of Delek Energy, and Halman Aldubi owns 1.1%. Their aggregate 4.1% holding is half the shares that Delek Group needs for the offer to purchase to go ahead.
Delek Group's offer to purchase Delek Energy has three components: participation units in Avner and Delek Drilling, which own rights to the Tamar and Leviathan gas fields, both of which are listed on the Tel Aviv 25 Index; cash; and shares in a new company, Delek Royalties Ltd., which will be listed on the TASE if the offer to purchase is successful.
A group of private shareholders in Delek Energy has organized in the past few days to try and persuade Psagot and other investment institutions to reject the offer to purchase. They claimed, among other things, that Delek Group would report an accounting capital gain if the offer to purchase succeeded, a claim that Delek Group rejected in a notice to the TASE on Tuesday.
In explaining the decision to accept the offer to purchase, Halman Aldubi told "Globes", "In contrast to the previous offer, Tshuva is sharing with the public the current and future royalties of Delek Drilling. The super royalties, which are an undilutable right to future capital raising by Delek Group's partnerships, allow the public to benefit from the partnerships' future potential in the event of more discoveries in addition to the discovery of oil at Leviathan.
"The offer to purchase also provides greater and direct tradability in assets that the company owns, because instead of shares in Delek Energy, which is listed on the Yeter Index, the public will receive shares in Avner and Delek Drilling, which are listed on the Tel Aviv 25 Index, and will not lose the rights to super royalties."
Despite the accepting of the offer to purchase by the investment institutions, there is still a small chance that the offer might fail, as 5% of Delek Energy is held by private investors. If most of them oppose the offer, the necessary response may not be achieved for the offer to succeed. (In contrast to votes in general shareholders meetings, shareholders do not have to vote against the offer to purchase; simply by not responding to the offer is considered as a rejection of it.)
Delek will publish the full results of the offer after the market closes today.
Published by Globes [online], Israel business news - www.globes-online.com - on August 28, 2013
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