* Emblaze and Netz would inject 826 mln shekels into IDB
* IDB Chairman Dankner would retain stake
By Steven Scheer
JERUSALEM, Aug 15 A group led by mobile
technology firm Emblaze Ltd has proposed to take
control of debt-ridden IDB Group, one of Israel's biggest
conglomerates, in a deal that would allow IDB Chairman Nochi
Dankner to keep a stake and prevent bondholders from seizing the
Emblaze and holding company Netz would inject 826
million shekels ($232 million) into IDB Holding Corp,
provided IDB first settles its obligations to its creditors, the
companies said on Thursday.
Under the plan, which still needs court approval, a new
company would be set up that would be 70.3 percent owned by
Emblaze and 29.7 percent by Dankner.
The new company would then own 72 percent of IDB, with Netz
- which is contributing 82.6 million shekels - holding 8 percent
and current shareholders would own 20 percent. It would own
about 50 percent of IDB Development, a unit of IDB, while IDB's
creditors would receive the rest.
The plan comes after Israeli investment firm BGI
said on Wednesday it had raised its stake in Emblaze to 20
percent and that it was negotiating to boost the holdings to
46.6 percent, which would give BGI control over Emblaze.
In turn, London-listed Emblaze would use a cash reserve of
some 500 million shekels to invest in IDB.
Many of the companies IDB owns have been hit by slowing
economic growth and increased competition. IDB Holding owes
bondholders 2 billion shekels and IDB Development
owes a further 5.8 billion shekels.
Bondholders of both companies - mainly institutional
investors led by U.S. hedge fund York Capital - have proposed a
debt restructuring that would oust Dankner and give them full
control of a combined company.
Dankner, though, is fighting to keep control of IDB. He has
tried to sell off assets to pay off the debt and is in talks to
sell Clal Insurance.
So far, bondholders have rejected IDB's offers.
The proposed takeover deal needs approvals from the
companies' stock and bondholders.
Emblaze's shares have been temporarily suspended in London.
IDB's shares were up 9.6 percent in afternoon trading in Tel
Aviv, with IDB's bond prices up as much as 5.7 percent. Netz's
shares rose 6.6 percent and BGI's shares were 1.9 percent lower.