Sources inform "Globes" that IDB Holding Corporation chairman Leon Recanati is expected to double his stake in the group as part of the formation of the company's new controlling core. The new core will include Recanati, Kardan Investments, and the Carasso family. Leon Recanati currently indirectly owns 8% of IDB, which is traded at a value of $1 billion.
An agreement is expected to be signed by the end of the month, under which Recanati, Carasso, and Kardan Investments will buy IDB shares from private companies, which are controlled by the Recanatis and the Carassos. Under the agreement, Oudi and Lenny Recanati, Leon's cousins, will sell their IDB shares, amounting to 12% of equity.
In the first stage, 35% of IDB Holding Corporation shares will be sold, in a $430 million transaction. Options for the balance of the controlling shares, amounting to 16% of equity, will be transferred to the new shareholders, and the exercise date of the options will be within the next three years. The total value of the deal is expected to reach $650 million.
After the completion of the first stage of the deal, Recanati, Kardan Investments, and the Carassos will each own 10-12% of IDB Holding Corporation. After the options are exercised, each may end up owning 17% of the group. Leon Recanati will need a partner to finance the purchase of his stake.
After the deal is signed, IDB Holding Corporation, Israel's largest holding company, is expected to energetically continue its reorganization, including mergers, elimination of costly staffs, and the sale of non-core businesses. These steps will include either the merger of Clal Industries and Discount Investment Corporation, or the merger of one of these companies with the parent company, IDB Development Corporation.
Published by Israel's Business Arena on 2 July 2001