Kibbutz Gvat is negotiating to sell its controlling interest in Plastro Irrigation Systems (TASE:PLSTR) to John Deere, the American agricultural machinery company.
Plastro explained that it decided to announce the negotiations, despite the damage that publicity could cause to the deal, because June 16 is the deadline to convert the company's bonds into shares.
The company, which makes drip irrigation systems, is presently owned by kibbutz Gvat (75%) and the public (25%). In May Gvat exercised a right it held and bought the holdings of Australian billionaire John Gandel in the company for NIS 95 million, a transaction that priced its shares at NIS 8.75.
Gvat paid for the shares using a loan from John Deere, guaranteed by an attachment to 61.8% of Plastro's shares.
When Gvat exercised its right to buy out Gandel, it blocked another deal in the works, under which Gandel was to have sold half the controlling interest in Plastro to a consortium including former Plastro chairman Uri Yogev, industrialist Dan Propper and investor Shlomo Dovrat.
At roughly the same time as it was borrowing money from John Deere, another irrigation-systems company, Netafim, offered to buy Plastro from Gvat for NIS 11-13 per share.
Netafim is the world's biggest drip irrigation company and Plastro is the No. 2. The takeover by John Deere poses substantial danger to Netafim's status: the marriage of Plastro's products and John Deere's distribution power could enormously boost the Israeli company's turnover.
Last week Netafim took another blow, when kibbutz Dan accepted an offer from a giant Indian company, Jain Irrigation, to sell half of NaanDan - another irrigation systems company - for NIS 150 million.
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