Elsztain seeks to delist Property & Building

Eduardo Elsztain Photo: Ronny Schitzer

Eduardo Elsztain's Discount Investment has made a tender offer to purchase all the public's holdings in Property & Building.

Eduardo Elsztain seeks to remove a level in the pyramid structure of Discount Investment, which he controls, in order to meet the requirement of the Concentration Law. Last week, Discount Investment published a tender offer to purchase all of the public’s holding in subsidiary Property & Building, with the aim of delisting the company.

Discount Investment, which currently holds 68.83% of Property & Building, is offering to buy the rest of the shares in the company for NIS 653.7 million. The offer is conditional on a response sufficient to delist the company.

Discount Investment’s offer is NIS 333 per share, representing a premium of 3.4% on Property & Building’s closing price at the end of last week. If the offer is accepted, Property & Building will become a private company wholly owned by Discount Investment, but it will still have to publish financial statements because it has NIS 4.97 billion of bonds at par value listed on the Tel Aviv Stock Exchange, and a solution for this will need to be found if it is not to continue being considered a level in Discount Investment’s group structure for the purposes of the Concentration Law.

Discount Investment also holds telecommunications company Cellcom, supermarket chain ShuferSal, technology investment company Elron, and investment house Epsilon. Property & Building is the group’s real estate investment unit, through public and privately held subsidiaries of its own.

Discount Investment posted a loss of NIS 31 million for the first quarter, among other things because of losses at Elron. It had cash of NIS 1.851 billion at the end of March, and is due to pay its bondholders principle and interest amounting to NIS 536 million in the rest of 2019 and NIS 482 million in 2020. This means that it will be able to carry out the offer to purchase Property & Building shares using its own resources.

Published by Globes, Israel business news - en.globes.co.il - on June 2, 2019

© Copyright of Globes Publisher Itonut (1983) Ltd. 2019

Eduardo Elsztain Photo: Ronny Schitzer
Eduardo Elsztain Photo: Ronny Schitzer
Twitter Facebook Linkedin RSS Newsletters גלובס Israel Business Conference 2018