With only a short time to go before the signing of the agreement on the transfer of control of IDB, it appears that investment company Kardan will own 23% of the company, becoming the largest shareholder. IDB chairman-designate Leon Recanati and the Carasso family will have 10% each.
Up until a few days ago, it appeared that Kardan, Recanati and the Carasso family would equally divide IDB’s controlling interest among them. Eventually, however, Leon Recanati and the Carasso family preferred not to accept too much responsibility, and handed over most of the controlling stake to Kardan. Kardan’s share rose over 6% in the course of trading.
IDB’s new controlling core will receive from the sellers, led by Oudi Recanati, options to increase their holdings by 8% beginning three years after the agreement is signed, for a period of two years. Exercising the options will increase Kardan, Leon Recanati and the Carasso family’s holding to 51%, which is worth about $650 million.
The acquisition of IDB’s controlling interest will be financed mainly by Bank Hapoalim, and apparently also by Deutsche Bank, Kardan’s partner in real estate and finance deals in East Europe. The First International bank is also involved in the emerging financing agreement. An understanding has been reached with Bank Hapoalim, the chief underwriter, that it will be able to turn some of the capital invested in the deal into IDB shares. Bank Hapoalim will not receive share options.
Sources close to the deal stress that, although Kardan is about to become IDB’s dominant shareholder, key decisions will be taken with the consent of all members of the controlling core, and with full cooperation among them. Leon Recanati will be the chairman of IDB’s board of directors.
Published by Israel's Business Arena on 30 July, 2001