Carasso Shareholder Nets Millions Ahead of Buyback

Haim Danon snapped up stock of auto importer in two weeks before the repurchase plan was unveiled.

Eran Azran
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Eran Azran

A stock buyback plan announced by Carasso Motors Sunday morning should be a boon to all company shareholders, but one investor has already hit the jackpot.

Haim Danon, a principal Carasso shareholder, acquired more than 1.4 million shares in the two weeks before the announcement that have already increased in value by about NIS 2.5 million.

That handsome profit includes more than NIS 1 million just in the two days of trading following the announcement.

Carasso shares jumped 5.85% in Sunday's trading in heavy trading and continued in the same trend Monday, until settling in the final stretch with a 1.54% gain to close at NIS 11.20. The company, which imports, markets and services Renault, Nissan, and Infiniti cars, is now trading at a NIS 756 million market valuation.

Danon is the sole owner of Comasco, a company dealing in construction machinery and systems founded in 1963 that represents companies that are based in the United States, France, Britain, Japan and other countries.

He began his recent buying spree by purchasing a 1.33 million block of Carasso shares on November 27 in an off-the-floor transaction for NIS 9.43 each. That purchase has already netted him an 18.8% return.

Danon followed up with three more considerably smaller purchases of the stock over the ensuing nine days leading up to the buyback announcement.

Prior to all this, Danon already held 3.9 million shares in Carasso - about 5.8% of the company's shares outstanding- most of it dating back to the company's initial public offering in June 2011.

Carasso said it would spend up to NIS 40 million until mid-March 2013 for repurchasing its shares. The stock was trading at NIS 10.42 at the time of the announcement, reflecting a 24% drop from its IPO price of NIS 13.70.

Share buybacks are equivalent to dividend distributions, and Carasso duly reported its compliance with regulations, stating that its distributable reserves from earnings amount to NIS 160 million.

The company pointed out that the purchase won't have any substantial effect on its capital structure, leverage, liquidity, or the fulfillment of its financial obligations or any other restrictions.

Danon declined to comment for this story.

Purchases of Carasso shares by Haim Danon in recent weeks