Migdal Insurance Co. announced to the Tel Aviv Stock Exchange at the end of last week the sale of its Ellern subsidiary in an off-floor transaction. The purchasers, brothers Dani and Gadi Dankner (sons of Avraham Dankner) and Dori Dankner (son of Shmuel Dankner), paid NIS 111.5 million for the company. Migdal's capital gain is expected to reach NIS 25 million.
Migdal holds 57% of the Ellern's capital and 72% of its voting shares. Ellern was traded last week at a value of $33 million. The transaction price reflects a value of almost $50 million for Ellern, similar to the asset value of its investments. Ellern, whose shares shot up 15% this morning, is a securities investment company, which Migdal last month announced its unexpected intention to sell. As far as is known, 20 concerns expressed an interest in purchasing a controlling interest in Ellern.
The purchasers, the second generation of the Dankner family, are designating Ellern for making high tech, real estate, and communications investments. Dani Dankner, who is also vice-chairman of Bank Hapoalim, was quoted today by the press saying: "Ellern is an investment company with cash, without leverage, with great business potential."
As far as is known, the purchasers do not intend to integrate Ellern in the Dankner family's traditional business, which is currently conducted through the Israel Salt Industries, Dankner Investments, Dor Chemicals, and Carmel Chemicals. A reasonable assumption is that they are emulating their cousin, Nohi Dankner, who has developed widespread private activity in tourism, aviation, and real estate, in addition to his involvement in the family businesses.
A senior Dankner family source today denied the weekend report in the "Ha'aretz" daily of a plan to split the family assets. The source stated: "No plan exists to divide the family assets, although solutions for the existing situation have been sought for almost three years. The report of an agreement to divide the family assets is without foundation."
Published by Israel's Business Arena on August 27, 2000