Xtra Holding and Elsztain Join Forces in Bid to Wrest IDB Control From Dankner

Court to decide who will try to rehabilitate Nochi Dankner's corporate pyramid

The battle over control of Nochi Dankner’s IDB group took another surprising turn Sunday with the news that the European-based Xtra Holding Group, which is controlled by Motti Ben-Moshe, and another group led by Argentine Jewish investor Eduardo Elsztain are joining forces to create a common front against Dankner’s investor group.

The financially troubled IDB group includes major fixtures on the Israeli commercial scene including Super-Sol, the country’s largest supermarket chain, and Cellcom, the cellular service provider. When faced with efforts by creditors to wrest control of his ailing corporate empire, Dankner teamed up with a number of investors, including Ukrainian Jewish businessman Alexander Granovsky, the Netz group and the Ezra family’s Neto group, which owns Tibon Veal and Williger Foods. The final decision on which group prevails will be up to the court.

Up to now Ben-Moshe’s Xtra Holding Group and Elsztain (who teamed up with a group of bondholders of IDB Holding, the company at the top of Dankner’s corporate pyramid) had been separately pursuing bids for control of IDB. According to a statement released by a media adviser to Xtra Holding, their new combined offer will provide IDB’s creditors with a package valued at NIS 1.53 billion (on the assumption that Clal Insurance is sold separately), reflecting a 71.1% repayment of their debt. If the separate sale of Clal Insurance does not take place, it would provide a 70.9% recovery through the payment of NIS 1.525 billion, the statement said.

The proposal does not involve an immediate cash payment, however, and is contingent on a number of factors. For its part, the Xtra Group says nonetheless that the combined deal provides creditors with certainty that the deal will proceed, based on available cash. The group has more than NIS 810 million deposited in Israel in trust accounts and the group says that this, when coupled with its commitment to support IDB Development, one of IDB’s group of companies, to the tune of NIS 400 million, provides creditors with the maximum degree of certainty and the prospect of immediate steps to rehabilitate Dankner’s corporate pyramid.

The combined Xtra-Elsztain group is also in the middle of consultations with Aharon Fogel, the former chairman of Migdal Insurance, about serving as chairman of IDB if they are successful in their bid.

Daniel Bar On