Nakash Brothers Join Dankner-Granovsky in Bid for IDB Holdings

New partnership replaces the Neto Group, which dropped out of the consortium; the deal will require anti-trust approval.

Nochi Dankner continues to exhibit the skills of a professional investment banker: The Neto Group had barely announced its withdrawal from Dankner’s group bidding to retain control of IDB Holdings on Tuesday morning, when the group disclosed a new partner - and one with deeper pockets.

The new partner is the Nakash Brothers, who have signed an investment deal worth NIS 250 million with the Dankner-Alexander Granovsky consortium as part of the rescue plan for the indebted conglomerate. At the same time, the consortium announced a new version of its offer, with better terms for bondholders.

The Nakash brothers, owners of Arkia and best known for founding the Jordache jeans brand, will put NIS 100 million in cash in a trust account and will invest another NIS 100 million in the group before the deal closes - if they win control in the court-supervised bail out. The remaining NIS 50 million will be used for various buybacks as part of the offer.

The Nakash’s offer is contingent on approval from the Antitrust Authority, since they own Arkia while IDB has its own airline, Israir.

The new Dankner-Granovsky offer for IDB includes a NIS 1.558 billion infusion of cash. IDB Holdings bondholders will have the choice between new bonds and shares or a cash redemption of bonds and shares in Holdings' IDB Development subsidiary - which is valued in the offer at NIS 1.318 billion, before the investment.

The Neto Group, which is controlled by the Ezra family and whose holdings include Tibon Veal and the food importer Williger, most likely withdrew its NIS 134.5 million offer due to antitrust problems. The firm is one of the biggest food suppliers in Israel, while IDB controls the country’s largest supermarket chain, Super-Sol. One-quarter of Neto’s business is done with Super-Sol, which had led other major suppliers and retailers in the food industry to predict unfair competition if Neto became a partner in the supermarket chain.

Ralph Nakash, one of three Nakash brothers, said they had decided to invest after spending only three days examining the investment. In addition to clothing and Arkia airline, the brothers have extensive real estate and other holdings. They recently bought the Versace mansion in Miami Beach, Florida.

In addition to the Nakash brothers, the Dankner consortium now includes Granovsky, an Ukrainian businessman who has pledged to inject some NIS 450 million into IDB through his investment vehicle Emblaze, the Netz Group, which is committed to investing NIS 61 million, Mexican businessman Daniel Jusidman and the Noiman family. In addition, Nochi Dankner’s father, Yitzhak, has an option of putting in another NIS 148 million.

Dankner is battling to retain control over the IDB group, which is saddled with some NIS 8 billion in debt. Another major investment group vying for control over IDB is headed by Argentine Jewish businessman Eduardo Elsztain.

Olivier Fitoussi