Elran has closed deals to buy the shares of five branches of the Dankner family in Dankner Investments and Dor Chemicals. The companies today notified the Tel Aviv Stock Exchange (TASE) that agreements were signed last night, under which Elran Holdings will pay $51.4 million for 57% of Dankner Investments the shares held by five branches of the Dankner family.
Dankner Investments is currently traded at a market value of $72 million. The sale was carried out at a company value of $90.2 million.
Five branches of the Dankner family will also sell their aggregate 55% stake in Dor Chemicals for $36 million. The price reflects a company value of $65.5 million for the company, while its current market value is $53 million .
Azorim Properties and Elran separately notified the TASE that they will buy 8.24 million Israel Salt Industries shares for $39.3 million from the Dankners. The sale reflects a price of $4.769 (NIS 22.13) per share, compared with Salt Industries current price of NIS 21.40.
Elran will buy altogether 61% of Salt Industries from five branches of the Dankner family for $116.6 million, reflecting a company value of $190 million, compared with its current market value of $183 million .
For several years, the Dankner family has discussed a plan of separation, which would allow some of the six branches of the extended family to sell their stakes in Dankner group companies. Over the years, family members have had frequent disputes, with some members threatening open battles for control .
The family has now finally found a way to arrange an open and comprehensive plan that will allow three branches of the family to own and manage the Dankner group companies, while putting an end to the quarrels and disputes .
With the completion of the sale, the Gineo family is expected to join the controlling interest in Elran. Elran notified the TASE that the sale, if completed, will be financed from internal sources, banks and a rights issue on the basis of a prospectus. Elran manager Gadi Dankner, the son of Avraham Dankner, said Elran planned to raise $40 million from shareholders, in addition to its $30 million cash reserves. He said Elran planned to finance 50-60% of the acquisition from equity, and therefore a part of the proceeds would be paid to the sellers in deferred payments.
Gadi Dankner added that the completion of the deal would turn Elran into one of Israel's leading and dominant holding companies, operating mainly in the real estate, infrastructures, banking, industrial and communications sectors. The concentration of the management of the family's business under a single roof will contribute toward streamlining the companies' operations, exploiting the synergy between them and strategic development as a group, instead of separate companies owned by individuals. Gadi Dankner claims that the unification will be expressed in expanded activity in Israel and overseas, among other things .
Gadi Dankner noted that the new holding structure of the group's companies will enable the branches of the family that currently manage the family companies to retain control: Shmuel Dankner will lead Dankner Investments; Avraham Dankner, who is traditionally identified with Israel Salt Industries; and the Gineo family, which manages Dor Chemicals, through its representative Dor Chemicals chairman Zvi Mor.
Prior to this sale, the various branches of the Dankner family owned 90% of Salt Industries, 87% of Dankner Investments, and 79% of Dor Chemicals. Salt Industries is currently the Dankner group's main holding.. Salt Industries has a 12% stake in Bank Hapoalim, and is a part of the bank's controlling interest, which is held by the Dankner-Arison group. Salt Industries also produces, packages and markets salt and aquaculture products.
Negotiations to sell a third of the controlling shares in Salt Industries to Joseph (Yossi) Maiman for $90 million (based on a company value of $180 million) were recently broken off. Maiman would have later become Dankner's partner in Salt Industries' controlling interest.
Elran's acquisition of the controlling interest in Salt Industries is expected to be through the purchase of the combined 17% stake of the families of Yitzhak Dankner and his son Nochi Dankner. Nochi Dankner wants to sell his stake in Salt Industries, due the acquisition of the controlling interest in IDB several months ago.
Completion of IDB acquisition is partly conditioned on the approval of the Antitrust Authority director general, who, as far as is known, is demanding that Nochi Dankner sell his stake in Salt Industries. IDB is one of Bank Hapoalim's largest borrowers, and it is therefore believed that the Antitrust Authority director general will not allow the transfer of control in IDB so long as Nochi Dankner is one of Bank Hapoalim controlling shareholders .
Dankner Investments is active in the real estate and communications sectors. Its wholly-owned subsidiary Dankner Construction and Development is one of Israel's largest real estate concerns. Dankner Investments also owns the controlling interest in Matav-Cable Systems Media (Nasdaq: MATV), through which it has stakes in Partner Communications (Nasdaq: PTNRLSE:PCCD) and Barak .
Dor Chemicals, which has a market value of $48 million, imports, manufactures and markets chemicals and polypropylene sheets. The Dankner family recently sold 12% of the company to Polar Investments for $7.5 million, 30% above its market value.
Shmuel and Avraham Dankner acquired control of Elran two years ago for NIS 100 million. Elran is managed by Gadi and Dori Dankner (Shmuel's son), alongside CEO Boaz Chechik Since acquiring control, Elran has participated in several infrastructure and real estate projects worth hundreds of millions of dollars. One project is the Ashkelon desalination facility. Elran subsidiary Dankner Ellern Infrastructures has a 25% stake in the consortium that won the BOT tender last year to build and operate for 25 years the 100 million cubic meter a year facility.
Published by Globes [online] - www.globes.co.il - on August 22, 2002