Tshuva disappointed with ICL's offer

ICL offered Delek Group's stake (50%) in IDE Technologies; Tshuva offered $350 million in return, opts to continue quest for buyer through UBS which guarantees $450-500 million

Golan Hazani, Calcalist|Published: 09.27.11 , 14:07

What is Israel Chemical's evaluation of IDE Technologies – the water desalination company in which it has an equal stake with Delek Group? This was the question on the table some three months ago when Yitzhak Tshuva's Delek Group initiated steps to sell its stake in the desalination company.

Calcalist has learned that Delek Group execs have been holding talks with Israel Chemicals chief Akiva Mozes, in which the value of IDE's activity was addressed. Mozes offered to acquire Delek Group's stake in the company for $350 million which reflects a valuation of some 700$ million for IDE Technologies.

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Delek Group found the offer unsatisfactory and decided to commission UBS Investment Bank, with which the company has been working in the past several years, to find a buyer for the stake. UBS estimated that it could find a customer that would be willing to pay as much as $450-500 million.

Calcalist has learned that right after the High Holidays, IDE Technologies will open an information room for potential buyers.

Last week, Calcalist revealed that Delek Group commissioned UBS Bank to find a buyer for its IDE stake after its attempts to reach an agreement with ICL on listing the company on the stock exchange came up empty handed.

ICL not enthusiastic

Delek Group, Yitzhak Tshuva's holdings company, bought a stake in IDE Technologies nearly 10 years ago for a mere $22 million. In 2007, Delek attempted to list IDE on the London Stock Exchange on a $750 million pre-money valuation.

In 2010, Delek made a second attempt, this time on a billion dollar evaluation. The first offering was hampered by the global crisis; in 2010 – it was ICL that blocked to move after demanding a higher valuation.

IDE Technologies constitutes a marginal portion of ICL's activity which is why the chemicals company was not all too enthusiastic about the offering which would make the public partner to IDE's activity without having to shoulder the securities that Tshuva and ICL had to put up for the establishment of worldwide desalination factories.

Delek, on the other hand, viewed the offering as a significant strategic move that would pen capital gains in its book and enable Delek to distribute dividends. Delek is now on a quest for a short track to cash – by selling off all of its holdings.

Estimates on the market are that Tshuva has another motive to sell the Group's desalination activity at a profit: the dividend he gets in return from Delek will be directed to shoring up another of his companies – tottering Delek Real Estate which is scheduled to pay its bondholders NIS 1.2 billion ($320 million) within the next 12 months.

ICL declined comment. Delek Group spokesperson commented that "we completely deny that any negotiations are being held with ICL on the acquisition of the holdings. No decision was made to sell IDE's activity."