Falkland Islands officials have fired a warning shot at Argentinean Jewish billionaire Eduardo Elsztain to back away from buying FIC - Falkland Islands Company. FIC, founded 165 years ago, operates the island's vital supply routes, and stores and plays a vital role in the fishing and oil industries. The UK government is concerned that Elsztain's bid to gain control of FIC is an Argentinean commercial takeover of the disputed British colony.
Last month, Elsztain's Dolphin Fund announced that it was considering an offer to purchase FIC's parent company, FIH Group, which is traded on London's AIM stock market. The budding bid raised the hackles among the Falkland Islands residents and now the island administration has intervened and virtually instructed Elsztain to abandon his bid to buy FIH. Real estate magnate Elsztain, one of Argentina's wealthiest tycoons, is the controlling shareholder in Israel's IDB Holding Corp. Ltd., which controls Shufersal Ltd. (TASE:SAE), Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL), Property and Building Ltd. (TASE: PTBL) and many more Israeli companies.
In a letter to the parent company’s CEO, released to the stock market in London, the Falkland Islands administration threatened to strip FIC of its land and trading rights, if Elsztain gains control. Under current arrangements with Falkland Islands authorities, FIC does not require a licence to own land and operate. However, if control changes hands, the authorities have the power to lift the exemption if it "was considered to no longer be in the general interests of the country. FIC would "then require a licence from the government to obtain any qualifying interest in land."
Elsztain is yet to make an actual bid for FIH Group, which is controlled by the Rowland family, donors to the UK ruling Conservative party. The Rowland family offered £3 per share for the 80% of the company they do not own but saw their bid, which valued FIH Group at around £37m, turned down in a vote.
The independent directors of the company have called rival interest from Elsztain "unwelcome" and a "real hazard" given the threat it poses to FIC’s ability to own land and trade. They turned down his request for information on the company.
The battle continues. Dolphin's London financial advisers Arden Partners said they were aware of the letter from the Falkland Islands Government but declined to comment on it.
Published by Globes [online], Israel business news - www.globes-online.com - on April 13, 2017
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