Gil Deutsch and Roni Biram May Get Phoenix Bonds Instead of Cash

A compromise agreement is in the works to end the dispute between the former owners of Excellence Investments, Gil Deutsch and Roni Biram, and Yitzhak Tshuva's Phoenix group over the purchase price for Deutsch's and Biram's remaining holdings in Excellence.

Deutsch and Biram have an option to sell the remainder of their stake to Phoenix for NIS 812 million, according to their calculations, based on Excellence's 2008 financial statement. Sources close to the negotiations, however, said the two men might make do with NIS 650 million. NIS 500 million of this sum would be paid in cash and Phoenix bonds, and the remaining NIS 150 million in stock options that could be converted to shares over the next two years.

Another possibility is that Deutsch and Biram would receive NIS 340 million in cash for half their Excellence holdings, and Phoenix would buy the remaining half over the next four years, in installments of NIS 70 million a year.

Excellence is currently trading at a market cap of about NIS 800 million. The share price has doubled since the beginning of the year, thanks to both the recovery of the capital markets and investor optimism over a compromise between Deutsch and Biram and Phoenix.

A source close to Deutsch and Biram said they would not comment to the press until the final details of their sales agreement with Phoenix are worked out.

Excellence, which is managed by David Baruch, had some high one-off profits in the first quarter of 2009. It therefore netted NIS 39 million, up 28% over the parallel quarter last year, even though revenues were down 2.2%, to NIS 136 million.