Disclosure of Tnuva Figures Could Return Mivtach to TASE

The company may also reverse its policy dating from January 2009 not to be involved in Tnuva's management.

The Sunday drama that culminated in Tnuva promising to publish its financial statement shortly in the public domain clears the road for Mivtach Shamir's return to the Tel Aviv Stock Exchange. It also renders the legal battle between the two companies, over the disclosure of Tnuva's financial, pointless.

The Israel Securities Authority ordered the TASE to suspend Mivtach Shamir stock from trade in May 2010, on the grounds that the company's financial statements were not in compliance with rules regarding disclosure. Specifically, Mivtach Shamir group companies own a 20.7% stake in Tnuva, which substantially impacts Mivtach Shamir's own financials. Therefore, under the rules, it has to disclose Tnuva's results. The snag was that Apax Partners, which owns the majority interest in Tnuva, refused to allow the food and dairy company's results to be revealed.

Zehavit Cohen, tnuva
Ofer Vaknin

Earlier this year, Mivtach Shamir almost closed the deal to sell its stake in Tnuva to a group headed by Leumi Partners, the investment arm of the Bank Leumi group, for NIS 775 million. That deal, and restatement of its results from the first quarter of 2008, would have satisfied the watchdogs. But for the purposes of Mivtach Shamir restating its results, it would need figures on Tnuva that Apax Partners made conditional on Mivtach Shamir signing a binding agreement with Leumi Partners. The deal fell through and Mivtach Shamir remained with the shares, and off the TASE.

If it had not remedied the problems, Mivtach Shamir would have been delisted once and for all in May 2012. But Apax Partners' decision on Sunday that Tnuva would release its financial statement - and quickly - obviates that fate for Mivtach Shamir, which is controlled by Meir Shamir.

As said, it also could well end the legal proceedings Mivtach Shamir and Tnuva have against each other. Another idea that Mivtach Shamir had been mulling was to sell its shares to its own controlling shareholder, Meir Shamir. Last week, Mivtach Shamir filed an originating motion against Apax and Tnuva, asking the court to rule that its request to receive Tnuva's financial statements for the purpose of an insider transaction, in which it would sell its shares in Tnuva to Shamir, did not violate the understandings between Mivtach and Apax.

In short, Mivtach Shamir may wind up keeping its Tnuva shares and get back onto the TASE as well.

The company may also reverse its policy dating from January 2009 not to be involved in Tnuva's management, a policy it stated in order to persuade the Israel Securities Authority that it did not have material influence at Tnuva. Therefore, argued the company, it didn't have to present Tnuva's figures in its own financial reports. (Yet clearly Tnuva continued to materially affect Mivtach Shamir's results. )

The appointment of Shlomo Rodav as chairman of Tnuva, in the stead of Zehavit Cohen, could also facilitate greater involvement in Tnuva's management by Shamir. Rodav and Shamir go back: They had tried to mount a takeover of Granite Hacarmel, which owns the Sonol chain of gasoline stations. True, they lost the race to Kanit, a vehicle of builder David Azrieli.