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Saturday, November 30, 2013

Bidder will remove Dankner from management if their bid for IDB wins


Ukrainian-Jewish businessman Alexander Granovsky said Thursday that if he and Nochi Dankner get the nod from a court to take control of the IDB group, Granovsky will remove Dankner and his associates from the management team. Dankner is currently the group’s controlling shareholder.

The Granovsky group and a rival consortium led by Argentine-Jewish businessman Eduardo Elsztain are vying to take control of the financially troubled IDB. Granovsky and Danker say they have brought food importer Willi Food into their consortium, although it appears that this commitment will be limited to a loan.

The group led by Elsztain and Israeli businessman Motti Ben-Moshe tried to solidify its position by making a deposit in a trust account that now holds a billion shekels to secure a proposed debt-rescheduling plan. The IDB group includes Israeli fixtures such as the Super-Sol supermarket chain and the Cellcom cellular service provider.

Granovsky and Jossef Schneorson, the chief executive of Granovsky’s investment vehicle Emblaze, said Thursday that Dankner would be removed from his management role at IDB if their bid succeeds.

“From the day we assume control, the management team of IDB, beginning with the position of chairman, currently held by Dankner; the chief executive, Haim Gavrieli; and senior IDB management [will be replaced by] a new team that is not part of the investor group,” Granovsky and Schneorson said in a statement. “They will be professional at the highest possible level that can be found in the Israeli business sector.”

Granovsky and Schneorson said they had been in touch with senior Israeli business figures in an effort to put together a management team.

For their part, Elsztain and Ben-Moshe said Granovsky’s bid was marred by uncertainties. They said the Willi Food loan in Granovsky’s plan was “apparently affected” by a conflict of interest.

On Wednesday Yossi Williger, who with his brother Zvi controls Willi Foods, denied that he would be joining the Granovsky-Dankner group.

But on Thursday the Granovsky group announced that Willi Food had agreed to provide a NIS 65 million loan to a firm controlled by Granovsky and Dankner as part of their bid for IDB. Yossi Williger is said to have the right to convert the loan into shares of two key IDB companies - IDB Development or IDB Holding.

Zvi Williger said no decision had been made on converting the debt to equity. An antitrust expert said Thursday that it was up to the antitrust commissioner to decide if a link-up between Willi Foods and IDB would violate antitrust rules in light of IDB’s control of Super-Sol, the country’s largest supermarket chain.

In related developments late Thursday, IDB Holding, the publicly traded company at the top of the IDB pyramid, said it lost NIS 380 million in the third quarter, compared with a NIS 17 million loss a year earlier. For the first nine months of the year the loss was NIS 358 million, compared with NIS 970 million a year earlier. Third-quarter revenues fell 6%.

Of particular interest in the figures was the cost of Dankner’s fight to retain control of IDB Holding, which owes creditors NIS 2 billion. In the third quarter, the effort at a debt settlement cost the company about NIS 17 million, including legal fees and payments to experts. Subsidiary IDB Development shelled out about another NIS 15 million in the quarter for similar expenses.

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