The sale of Mivtach Shamir Holdings Ltd's (TASE:MISH) shares in Tnuva Food Industries Ltd. to Bank Leumi (TASE: LUMI) has been cancelled, the bank and the company notified the TASE today. Last month, "Globes" reported that the closing of the sale had been postponed by several weeks. The closing was supposed to happen within two months.
The cancellation announced by Bank Leumi and Mivtach Shamir today is of a technical nature, because the original June 15 deadline for closing the deal expired. "Globes" reported on talks to further extend the deadline on June 14.
In the notices to TASE, Mivtach Shamir and Bank Leumi both said, "The parties are in talks about a possible renewal of the validity of the agreement." Mivtach Shamir implied that Apax Partners was responsible for the agreement not being extended. Mivtach Shamir stated, "After negotiations between Mivtach Shamir and the bank, and between the bank and Apax Partners over possible terms for extending the deadline for meeting the conditional terms which had not been finalized… the agreement expired and is no longer in force."
A source close to the subject told "Globes" that Apax refused to provide certain information about Tnuva, and therefore the negotiations with Bank Leumi broke down and the agreement was not extended.
Last month, "Globes" reported on several conditional terms that Mivtach Shamir demanded to close the Tnuva deal, including a demand to link the date of the closing to the resumption of trading of Mivtach Shamir's shares on the TASE.
It is believed that when trading in Mivtach Shamir's share resumes, the price will rise strongly because of the large sale of Tnuva. The TASE suspended trading in the share a year ago, when the company's market cap was NIS 1.1 billion. The company subsequently received a NIS 500 million dividend from Tnuva, and it is expected to make an additional NIS 775 million from the sale of Tnuva. Mivtach Shamir will have made a profit of NIS 900 million and received cash of NIS 1.3 billion three in the three a half years of its investment in Tnuva.
Mivtach Shamir is selling 20.7% of Tnuva through the sale of its 27% stake in the special purpose vehicle through which it and Apax own Tnuva (Apax owns the other 73%). Bank Leumi will pay NIS 387.5 million for 13.5% of the special purpose vehicle, giving it a 10.35% stake in Tnuva. The rest of the shares will be sold to four private investors: the Turgeman family, Avi Gross, Yehudit Recanati, and Gil Rubinstein, each of whom will pay NIS 97 million for 3.4% of the special purpose vehicle.
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