The audit committee and the board of directors of IDB Development, a unit of the IDB group controlled by Nochi Dankner, decided last night to approve the merger between Koor Industries Ltd. (TASE:KOR) and Discount Investment, which was voted upon by the shareholders of each of the parties to the deal.
IDB Development directors who also serve on the boards of one or both of the companies in the merger did not take part in last night's vote.
The IDB Development board justified the merger on the grounds that it would reduce the number of levels of holdings within the group, in a way consistent with legislation currently being promoted on pyramid structures, and that it would also lead to savings in management expenses.
In addition, as Discount Investment, an important holding of IDB Development (it holds the group's stakes in, among other companies, Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL) and Shufersal Ltd. (TASE:SAE)) reported, the merger will improve Discount Investment's liquidity and financial strength, and, according to consultants advising IDB Development, it also makes business sense.
In the past few days, Koor has sold 5.5 million shares of Credit Suisse, for a total of 155 million Swiss francs (about NIS 597 million). This will produce a net profit of NIS 73 million in the third quarter. Koor used 62 million Swiss francs to repay part of the balance outstanding of the loans extended to it by Morgan Stanley and Citibank that were secured by the stake in Credit Suisse. The remaining balance of the loans is now 280 million Swiss francs (NIS 1.08 billion). Koor is left with a 1.6% stake in Credit Suisse, worth 733 million Swiss francs.
Published by Globes [online], Israel business news - www.globes-online.com - on September 12, 2013
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