The price of the shares designated for distribution is 20% higher than market. Merrill Lynch will give Tshuva a bond, which can be cancelled in the event the shares are not sold by the redemption date of the bond.
Yitzhak Tshuva is continuing to shore up capital market assessments to the effect that he acquired his principal businesses in the energy and high-tech fields at bargain prices. Delek, the Israel Fuel Corporation, and Green Software Development, in which Tshuva holds 87% and 64% respectively, today forwarded a report supporting the high market values reached last year. This applies particularly to the technology arm of Green, which is traded at a value of over $80 million, even though its shareholders' equity, as of the end of 1999, stood at only $1 million (since then, the company has raised $10 million in private placements).
The two companies today announced negotiations being conducted by Yitzhak Tshuva with US investment bank Merrill Lynch (together with IBI Underwriting) for an agreement whereby Merrill Lynch will purchase and distribute 4.99% of their shares among its customers. The principles of the agreement provide that Tshuva will sell the American bank the shares at a price of NIS 308 per share (Delek) and NIS 80.7 per share (Green). In both cases, the price is 20% higher than this morning's market price.
The Delek deal reflects a company value of $725 million and is accordingly expected to amount to $36 million. The Green deal reflects a company value of $100 million, and should accordingly amount to $5 million. Tshuva already announced at the beginning of the week that he would sell 10% of Green to Bank Leumi for $10 million, which reflects the same company value.
Published by Israel's Business Arena on 17 May 2000