IDB creditors vote Dankner out of business
Elsztain-Ben Moshe's offer to oust Dankner wins 75% of board vote by swinging Bank Leumi to vote in favor. But CEO of holdings group hasn't bowed out yet: 'The final word hasn't been said'
IDB
creditors voted 75% in favor of Eduardo Elsztain and Motti Ben-Moshe's offer to take control of the company Sunday, defeating Nochi Danker and Alexander Granovsky's offer.
The dramatic decision is now subject to the courts' approval, and Danker is now set for a long legal battle for control of IDB.
The first point of contention will focus on erasing the 75% majority that Elsztain and Ben Moshe received from the creditors. His lawyers will claim before Tel Aviv District Court Judge Eitan Orenstein that a significant portion of the votes should be nullified as because of conflict of interest, a result of the fact that the voting creditors also hold the debt of subsidiary IDB Holdings.
In the first round of voting, Elsztain-Ben Moshe received 71% of the vote, while Danker-Granovsky received 35%. In the second round of voting, Bank Leumi, which had previously abstained, supported the Elsztain-Ben Moshe vote, and together the offer received the necessary 75% majority.
Dankner said in response that the news about IDB's transfer were preliminary. "The counting of the votes and the judicial process aren't over yet. It's important to remember that two weeks ago we were winning the vote by a large gap, and I believe that the final word hasn't been said yet, and the final result will be different."
Ben Moshe said the decision was all but over. "We're going to lead the path to a new IDB. We plan on bringing value to the stockholders, creditors and the Israeli consumer."
Dankner's claim of conflict of interest is based on the investment houses of Psagot, Gilad, Meitav Dash and Harel, which hold interest bonds in IDB. In a vote last year, the trustees counterbalanced the institutional investors, and as a result Psagot left IDB Holdings. Now the trustees are claiming that there is no conflict of interest. But this is something the judge will decide.
This isn't expected to be the only request brought before the courts. The Elsztain-Ben Moshe group is also expected to ask that the court counterbalance votes due to a conflict of interest, this time from Credit Suisse, which is trying to collect its debt from Dankner's privately-owned Tomahawk Investments. The bank is expected to claim that the 30 million NIS debt is insignificant.
'The real winner – the public'
Ohad Aloni, a private bondholder who unified the other bondholders and supported the Elsztain-Ben Moshe offer, said that what happened Sunday is only good news for bondholders. "For more than 15 months we've been engaged in a long and tiring settlement. The real winner is the public, who will receive 70% of the debt in return, which today stands at 2 billion NIS."
Aloni dismissed the notion that this is revenge ouster of Dankner. "This isn't about getting even. At the end of the day we chose the better offer, one that guarantees a level of certainty and one that presents an impressive management team."
IDB Holdings has a debt of 2.2 billion NIS. Of that figure, 1.9 billion NIS is owed to five series of bondholders and 120 million NIS is owed to Bank Leumi.
Itay Blumenthal contributed to this report
