European Firm Xtra Holding to Bid for Israel’s Troubled IDB

The company says its debt-free balance sheet positions it to take control of the Israeli conglomerate and oust tycoon Nochi Dankner.

Europe-based Xtra Holding said this week it will bid for control of IDB Holding Corporation, the latest potential suitor for Nochi Dankner’s debt-ridden conglomerate.

Xtra Holding's lawyer in Israel, Yaniv Rog, said Tuesday the company had met with IDB shareholders and had transferred $100 million to its accounts in Israel for a potential deal.

Xtra Holding is privately owned with interests in energy, communications, insurance, commodities, tourism and billing in Britain, Germany and the Netherlands. The company's chairman - and co-owner - is Moti Ben-Moshe, an Israeli who lives in Modi'in. Xtra intends to acquire IDB either through subsidiary Xtra Energy or a new firm established to carry out the deal.

“We think IDB has the potential to greatly appreciate in value,” Ben-Moshe told TheMarker. “We analyzed its condition over the past four months and concluded that with financial backing from Xtra Holding it will be able to service its debts.”

Ben-Moshe declined to say how much his company might bid or whether Xtra's bid would be based on IDB bondholders accepting a loss. He said the details would be made public when the bid is submitted by the October 20 deadline. He said that unlike other bidders, Xtra did not need a deadline extension.

IDB Holding’s subsidiaries include Clal Insurance, Cellcom Israel and supermarket chain Super-Sol.

Among possible bidders is a group of investors from the United States, China, Hong Kong and Singapore led by Neil Bush, brother of former U.S. President George W. Bush. IDB executives have said Dankner and his partner, Ukrainian businessman Alexander Granovsky, need time to win approval from shareholders at Granovsky’s company Emblaze to move forward with their own restructuring plan for IDB.

Rog, Xtra’s lawyer, said the company is eyeing the synergy potential with IDB Holding subsidiaries, and co-owner Ben-Moshe is also optimistic.

“Our financial strength is greater than that of the other parties around the table,” Ben-Moshe said. “We’re an unleveraged company without any debt.” He added that if Xtra takes over IDB, it would appoint a team of Israeli executives to manage the conglomerate while ousting Dankner from the top of the company.

On Wednesday, court-appointed expert Eyal Gabbai and observer Hagai Ullman submitted a request to the Tel Aviv District Court to postpone the deadline for submitting bids to November 3. They also requested that the court require bidders to deposit at least NIS 70 million.

Ofer Vaknin