Magal Security Systems Ltd. (Nasdaq: MAGS) has begun the process for a rights issue aimed at raising $24 million. In the issue, Magal is offering its shareholders the right to buy three shares at $11.58 a share for each eight shares they hold. The offer reflects a $3.86 share price, constituting an 18.7% discount on the market price. In addition, anyone fully exercising their rights can buy more shares for which the rights were not exercised by their owner. The rights issue is valid until September 30.
Magal controlling shareholder FIMI Opportunity Funds, controlled by Ishay Davidi, announced its intention of exercising all of its rights in the issue, and that it was likely to also buy additional shares. If this happens, FIMI is likely to attain a holding of 50% or more in Magal. FIMI currently holds 39% of Magal's share capital, and at a meeting held several weeks ago, the shareholders approved FIMI's increasing its holding above 45%, as required under the Companies Law.
FIMI acquired control of Magal in 2014 at $3.50 a share. Magal notes that it is planning to use the money raised in the issue for general business needs, including expansion of its business through acquisitions or investments in companies and complementary technologies.
Managed by CEO Saar Koursh, Magal is active in three sectors: perimeter defense systems, perimeter security projects for sensitive facilities or special events, and cyber security. The company's market cap is $78 million.
Published by Globes [online], Israel business news - www.globes-online.com - on September 8, 2016
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