Fahn Kanne was commissioned to perform the valuation for Tau and calculated the consideration each bondholder would be entitled to (2-Series and 3-Series) under the terms of the debt arrangement suggested by Ben-Dov.
According to Ben-Dov's proposal, 55% of Sunny Electronics' shares will be transferred to Tau against 24%of the new Tau shares that will be issued to the bondholders.
Fahn Kanne presented four scenarios each of which is based on a different price for Sunny Electronics' stock. Under the present arrangement and on the basis of Sunny Electronics' share price in late August, the company's bondholders will receive only NIS 63 million ($17 million) out of the overall NIS 380 million ($104 million – par value, interest and linkage) – on the whole, an 83% haircut.
An alternative to these scenarios is the liquidation of the company, which according to the opinion would yield bondholders a fractional NIS 8 million ($2 million). The audit committee and Tau's board of directors gave the proposal the thumbs up on the grounds that "if and to the extent that Ben-Dov's proposal will be carried out, it will improve the company's business and financial state as compared with liquidation."
The additional evaluations reveal the financial value of the companies held by Ben-Dov. Partner Communications' valuation was NIS 8.16 billion ($2.24 billion) which is 40% higher than its market cap; subsidiary Scailex's valuation was NIS 1.55 billion ($430 million) – twice as much as its market cap.
It is interesting to see that Samsung's activity in Israel leapt from NIS 404 million ($11 million) in the valuation form 2010 to NIS 811 million ($223 million) in the present valuation. Sunny Electronics' valuation was NIS 1.04 billion ($290 million) – 60% higher than its market cap.
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