Businessman Eyal Yona may decide to break up a partnership with U.S. investment company Shamrock in the Mediterranean Properties & Investment (MPI) company, if Shamrock chooses not to go ahead with buying control of the Gmul investment group.
Based on previous experience with Bank Hapoalim - which was both the major financier behind the Trump brothers' acquisition of control in Gmul two years ago, and of Shamrock's buying 50 percent in the Motorola mobile phone company - Shamrock, the investment arm of the Disney family, is not keen to get involved in the latest deal.
Shamrock and Yona's Marlaz (Building & Assets Company Mishor Hachof) company each own 44 percent of MPI, and Yona believes MPI is the only vehicle that he could use to finance a large deal, such as buying control of the Gmul investment group.
The Trump brothers, Jules and Edi, bought 65 percent of Gmul two years ago, financed through a NIS 380 million loan from Hapoalim. Some NIS 300 million of this was non-recourse.
The brothers have now decided to dispense with the majority of their Gmul holding, and negotiations are under way with Eyal Yona.
Yona recently bought a chain of gas stations and convenience stores in the U.S., jointly with Gmul, and is interested in acquiring control of Gmul. But he contends the only option of financing the deal would be to conduct the acquisition through MPI.
Shamrock may possibly have been deterred from participating in the deal, from its earlier experience with Bank Hapoalim, which extended a non-recourse loan of $375 million to Shamrock to buy 50 percent of the Motorola mobile phone company. Since the Motorola deal, the company value dropped significantly (as did the general market). As a result, Hapoalim was forced to put aside provisions to cover the debt. As a non-recourse loan, the bank's only security was the Motorola shares themselves, and the bank had no recourse but to claim other securities from Shamrock. This may have caused uncomfortable tension between the bank and the U.S. investment company, which may have colored Shamrock's lack of interest in joining Yona in the Gmul offer.
The Trumps' negotiations with MPI have focused on selling 35-45 percent of Gmul to MPI according to value of $120 million, four times the market value on opening of trade yesterday. The share leaped almost 16 percent during the day.
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