Enter Holding's Amit Berger Pulling Off Perfect Takeover

Vows that Enter bondholders will get their money back.

Worry not, says Amit Berger to bondholders of his company, Enter Holdings. He says they will get their money back.

Berger will be buying Enter's holdings in Tel Aviv-based brokerage Perfect.

"I don't want anybody tipping their hat to me [chapeau]," he says. "All I care about is that the bondholders get their money back, and I mean to stand by my word. There are a lot of people in capital market circles who wouldn't be doing that," he added.

Phone lines at Enter were inundated the day after the company revealed that Berger would be buying its 33% stake in Perfect, for NIS 41 million. Enter's first payment to bondholders is due in July, and it's more than NIS 30 million.

The element that brought Enter low was the Tiv Taam supermarkets chain, or rather, one (or possibly more) cats that helped themselves to a snack at a Tiv Taam storage center - and were caught noshing on candid camera. The film was subsequently televised on the Kolbotek consumer affairs show, which was actually featuring Tiv Taam for the second time.

The first expose had been the year before, showing that three of the chain's branches had been taped selling foul fowl as "spicy chicken nuggets."

Enter owns a controlling stake in Tiv Taam, and the chain's losses in 2007 reached NIS 30.9 million, mainly caused by fighting Kolbotek. When the rotten chicken flap hit the press, Tiv Taam apologized, but not this time, and hiring lawyers and running an ad campaign cost it dearly, as did losses from special sales designed to retain customers.

Tiv Taam's loss reduced Enter Holdings to an equity deficit. It can't raise more money if only because of the condition of the marketplace, so to pay its bondholders, it needs a cash infusion, and a fairly quick one at that. Its Tiv Taam shares are at present worth about NIS 62 million, after they lost 62% of their value this year. But it is prohibited by an agreement from selling them until 2009 at least.

Amit Berger was upset yesterday by criticism of his deal to buy Perfect, which is good for everybody but himself, he argued. "All I care about is that Enter's bondholders get their money back, and after them I care about Enter's shareholders," he told TheMarker.

"All I wanted in this deal is to create a win-win situation: Enter sells Perfect at a price beyond its market value, the bondholders get their money back. The only one losing money here is me," he stressed.

Berger refused to say who's financing his Perfect takeover but said that the financing deal had been closed, and that he wouldn't have brought the transaction before the Enter board of directors for approval if he hadn't sewn up funding in advance. He does boast that he can get a better deal from the banks than most people in Israel. "I can obtain financing even though the transaction is a complex one," he added.

There is another point. Because Perfect manages mutual funds; its shares can't be used as collateral unless the Finance Ministry allows it, which is a process that would take months. He put together a financing deal in two weeks, Berger said.