Negotiations broke down at the weekend between Yitzhak Teshuva and Discount Investments managers Udi and Leon Recanati, for co-operation on the management of Delek. The sides agreed to continue to negotiate, in order to finalize and sign a new agreement, according to which Discount Investments will sell Teshuva its shares in Delek (37.6%), at a price of NIS 160 per share, 17.6% higher than the stock market price.
Teshuva will pay Discount Investments a total of NIS 521 million for the shares in Delek, and will hold 87.8% of the company’s shares. Teshuva initially purchased from Bank Hapoalim, Eliezer Fishman and institutional bodies, 50.2% of Delek shares in March, through the public company Tashluz Properties, which paid NIS 773 million for the purchase.
Teshuva, whose hostile takeover of Delek last month surprised Discount Investments managers, told "Globes" today that he had recently been approached by several investors interested in purchasing Discount Investments shares in Delek.
Since the negotiations had not yet reached fruition, and in order not to increase the financial obligations of Tashluz Properties, Teshuva said he had decided to purchase the Discount Investments shares himself, and to hold them until a strategic investor is found. "The deal with Discount Investments will be concluded within a few days," said Teshuva. On the question of how he intended to finance the purchase, Teshuva refused to provide details, and merely said "There’s no problem".
Teshuva said he was currently examining several offers from foreign and local investors, so that one of them will become a strategic partner in Delek shortly after the purchase of shares. "Among the offers are those from investment banks and international entities dealing in the energy field, which see great potential in Delek. I estimate that, within a short time, one of them will join me as a strategic investor in the company. The investor who enters the company will bring the company greater value than it presently possesses."
Published by Israel's Business Arena April 5, 1998