A compromise has been reached between the ordinary shareholders of Beit Egged and the Egged bus co-operative. There are more than 200 ordinary shareholders, accounting for 54% of Beit Egged's paid-up share capital.
Under the compromise arrangement, which today was given the force of a judgement, Adir Inbar, CPA, will be appointed expert for determining the value of an ordinary share in the company. To that end, he will appoint a licensed land valuer who will appraise the value of Egged's real estate. Inbar is a partner in the Brightman-Almagor accounting firm, and vice president of the Institute of Certified Public Accountants in Israel.
Each party will present Inbar with an opinion relating to the determination of the share value, and he will make his decision known to the parties within 60 days. The expert's decision will be not more than 10% lower and not more than 20% higher than the share value determined by Kesselman & Kesselman, CPAs, in March, namely $7,138 per share. The opinion will be deemed to be the agreed price.
If, as determined by the expert, the share value stands at an amount more than 10% lower than Kesselman's valuation, then the agreed price per share shall be deemed to be as determined by Kesselman less 10%, which is to say, $6,424.
If the expert places the share value at an amount more than 20% higher than Kesselman's determination, then Mifalei Tahanot (Stations Enterprises), Egged's controlling shareholder, shall be entitled to serve notice, within thirty days, that the expert's determination is unacceptable to it, and it shall not be obliged to purchase shares from applicants other than at a price of $8,565, which is as determined by Kesselman plus a 20% increment.
It was also determined that during a purchase period of 90 days as of the expert's determination, any ordinary shareholder may notify Mifalei Tahanot that he wishes to sell his shares, and Mifalei Tahanot shall be obliged to purchase them.
It was also agreed that wherever shareholders fail to serve notice that they do not agree to the price of $8,565, they shall vote in the company's general meeting in favour of a draft resolution to be submitted by Mifalei Tahanot, proposing that Beit Egged shall become a public company whose shares are listed on the Tel Aviv Stock Exchange. They will also vote in favour of a merger with NTM Commercial & Transportation Assets.
Beit Egged's 513 shareholders (holding 12% of the share capital) filed action with the court, alleging that the company's Board of Directors was managing it in a discriminatory manner prejudicial to its interest.
Mifalei Tahanot filed action against the shareholders, motioning that they be ordered to vote in favour of making the company a public company. Beit Egged plans to become a company whose shares are listed on the stock exchange and to merge with NTM Commercial & Transportation Assets, enabling it to raise money from the public to build a tower of up to 40 storeys on the site on which Egged House stands in Tel-Aviv.
Published by Israel's Business Arena December 27, 1999