Delek Glbl Share Discussion Threads

[kenny] 17/4/2009 22:02

The dividend of 7p on the 15% of shares not held by the holding company represents less than one months' net income for DGRE - hardly generous, indeed it demonstrates how much value is being STOLEN by this extremely low bid.

[topvest] 17/4/2009 21:34

Well, interesting news today. A 7p dividend is nice.

[kenny] 17/4/2009 12:17

It's more complicated than that. It is the real holder behind the Spreadex holding that has recently bought shares in order to block the takeover and "greenmail" Delek into paying more. They are presumably happy to take a quick 22% profit. I believe there is a lot more value and other holders should and will hold out for a better offer.

REMEMBER net income after interest and all costs is 16p per share per annum and NAV at 31.12.08 was declared at 188p per share.

[grollfam] 17/4/2009 12:06

OK, but why would spreadex give undertakings unless they were approached by DELEK to vote in favour

[kenny] 17/4/2009 12:02

They are required to under takeover rules. See my post 221 above - I still believe sharholders should vote against this and also write to the Court in Jersey.

[grollfam] 17/4/2009 11:59

Thanks KENNY,

Why would company make announcement about spreadex vote ???

[kenny] 17/4/2009 11:53

grollfam - see RNS.

[grollfam] 17/4/2009 11:52

nickcduk,

how do you know spreadex accepted offer ????

Any other figures ?????

Can we inspect the proxies received ????

[kenny] 17/4/2009 11:38

I do not think another 7p dividend is enough. I think the 50p takeover needs to be raised to 85p - at a minimum.

Even with the 3% from Spreadex they may not have enough votes. Hold for further developments. REMEMBER net income is 16p per share per annum and NAV at 31.12.08 was declared at 188p per share.

Compare that with an offer totalling 57p per share!

I am going to vote against this revised offer.

[nickcduk] 17/4/2009 11:25

I think the 7p dividend was the sweetner to clinch the deal. They have had spreadex accept the offer today. Should go through now I imagine.

[flying pig] 17/4/2009 09:51

today's the day the teddy bears have their picnic.

We will see if turkeys vote for Christmas.

[flying pig] 14/4/2009 17:06

grollfam

I understand this is the deal in question.

RNS Number : 3175Q Delek Global Real Estate PLC 08 April 2009




8 April 2009

Delek Global Real Estate plc ('DGRE' or 'the Company')

Sale of Canadian Property

Delek Global Real Estate (AIM:DGRE) announces that legal entities (a trust and a company) indirectly wholly owned by the Company (the 'Vendors') completed the disposal of 'Place Chatel', a residential property located in Montreal, Canada (the 'Property').


The Property comprises a 27 storey building which contains approximately 300 apartments as well as a commercial area and office space on the lower floors.


As at 31 December 2008, the total value of the Property in DGRE's accounts was 37.5 million Canadian Dollars ('CAD') (approximately GBP 20.5 million). The annual net operating income for the Property for the year ended 31 December 2008 was CAD 2.45 million (approximately GBP 1.34 million).


The Property has been sold for a total consideration of CAD36.7 million (approximately GBP 20.1 million) (the 'Consideration').


The outstanding balance of the loan relating to the Property (the 'Loan') is approximately CAD 21.6 million (approximately GBP 11.8 million).


In order to avoid an early termination of the Loan, part of the Consideration was paid by the purchaser by way of an assumption of the Loan by the purchaser. The Loan was secured, inter alia, by guarantees given by the Vendors and other entities which hold additional properties in Canada. These guarantees shall remain in force until the end of the term of the Loan from the bank (which is expected to be terminated at the beginning of 2011). In the event that the guarantees are called upon, the guarantors shall step into the bank's shoes with respect to the mortgage over the Property. DGRE has not provided any guarantee in respect of the Loan.


- Ends -

[flying pig] 12/4/2009 16:08

I suggest you e-mail Panmure Gordon and the company for an explanation.

[e-mail]

is one of the appropriate contacts, but of course Panmure Gordon are acting exclusively as financial advisers to the company and will duck all responsibility to private shareholders. hardly surprising is it? This is made abundantly clear on the front page of the document.

I completely agree about voting against the theft. However, it is not particularly easy in the dematerialised world.

Please note that if the vote is in favour of this corporate action, we still have a chance to write to the court to register a protest.

[grollfam] 12/4/2009 15:37

Delek Real Estate unit sells Montreal building

PLEASE READ COMMENTS IN TODAYS ISRAELI PRESS WHICH TOTALLY CONTRADICTS THE INFORMATION IN THE CIRCULAR TO SHAREHOLDERS.......

Delek Real Estate CEO: The property was sold at a price and at terms that are no different than before the crisis.


Globes' correspondent12 Apr 09 11:39
The sell-off at Yitzhak Tshuva's Delek Group Ltd. (TASE: DLEKG) subsidiary Delek Real Estate Ltd. (TASE: DLKR). Subsidiary Delek Global Real Estate Ltd. (AIM:DGRE) on Friday completed the sale of the Place Chatel high-rise in Montreal for NIS 123 million. The 27-storey building has 300 condominiums as well as commercial and office space on its lower floors. The company did not disclose the name of the buyer.
Delek Global Real Estate stated Place Chatel was sold for C$36.7 million, compared with its book value of C$37.5 million at the end of 2008. The outstanding balance of the loan on the property is C$21.6 million, which the buyer will assume.


The company said that in recent months it has sold properties for a total of NIS 780 million.

Delek Real Estate CEO Ilik Rozansky said, "The company continues to stick to its strategic plan of the sale of properties and increase in liquidity. The present property demonstrates the soundness and quality of the company's properties in Israel and in other countries. Net rent was NIS 8.2 million (C$2.45 million) in 2008, yielding 6.66% on the net sale price. The property's sale price and the derived return again underscore the quality of the company's properties and its ability to sell them at terms that are no different from before the crisis."

Delek Group's share rose 4.9% by late morning to NIS 385.40, Delek Real Estate's share rose 9.1% to NIS 5.01. Delek Global share closed at ₤0.475 on Friday on London's Alternative Investment Market, giving a market cap of ₤126 million.

Published by Globes [online], Israel business news - www.globes-online.com - on April 12, 2009

© Copyright of Globes Publisher Itonut (1983) Ltd. 2009(AIM)

PLEASE ALL VOTE AGAINST THE EXPROPRIATION OF SHARES BY THE CONTROLLING SHAREHOLDER.....

[flying pig] 09/4/2009 08:02

I have not yet done an analysis, but other investment property companies share prices have increased dramatically in recent weeks. This scheme is really bad news.

[kenny] 08/4/2009 23:24

Another property sold and in the last two months they have raised more than enough to do the buy out - irrespective of the fact there was already enough cash there to implement the lowball offer. Never mind the tens of millions from the sale of an interest in NCP carparks.

This proposed buyout is really obsene and the lack of action from the FSA or the Stock Exchange just shows how corrupt the AIM market has become. Who would wish to invest in any quoted company - even the "honest" companies are only vehicles for directors to pay themselves inflated salaries and bonuses which are totally unrelated to performance.

[a0469514] 08/4/2009 13:42

I cannot see how Topvest thinks that 50p is reasonable. Perhaps he is one of the so called independent directors.

I have today phoned TD Waterhouse and find that, despite my shares being a nominee holding, they will in fact vote on my behalf when asked. I have therefore instructed them to vote against the scheme of arrangement and urge anyone else in a similar position to do likewise.

Xylos

[flying pig] 07/4/2009 19:48

Even if 75% votes yes - therre is still an opportunity to make representations to the Court!

All is not lost.

[a0469514] 07/4/2009 12:40

I hold my shares through TD Waterhouse as a nominee holder. They have notified me of the offer but it is for information only. There is no invitation for me to say how I want my vote placed.
It really emphasises to me that the nominee system of holding shares in the UK is rotten to the core and anti democratic. The former system where a company really was owned by its shareholders is history and the whole system is in need of reform.
Aim is riddled with faults, as is the nominee system and yet further regulation is not the answer as this has caused the private investor to be walked all over by the institutions when it comes to a company raising new funds. Now we never get rights issues, only placings at massive discounts to the favoured few.
It is all very depressing.

Waterhouse's note states that the scheme is expected to become effective on or around 24th April subject to the approval at a shareholders meeting on 17th April and I should receive the cash proceeds on 8th May.

xylos

That all seems too easy for them. Contrast that with another Israeli company I have shares in - Dmatek. They are being taken over on an agreed bid at a fair price and yet under Israeli law the takeover has to go through all sorts of procedures before the authorities are satisfied that the deal is acceptable and it has taken months.

[kenny] 07/4/2009 08:50

I am also going to vote against the lowball offer of 50p.

I would rather have shares in an unquoted company producing 16p per share in net income than accept this offer. There is a greater chance of dividends or capital distributions.

We need to somehow drum up support - over 25% of those eligible to vote that do vote must vote against to block the takeover - which is not as high a precentage as it sounds.

[flying pig] 06/4/2009 21:21

it is not clear how this one will work out.

Very few schemes of arrangement are ever proposed without a recommendation from the directors.

I am told that even if the scheme gets the necessary votes, there will then be an opportunity in the courts of Jersey for investors to complain.

While the shares might/will end up being "delisted", there will inevitably be a grey market.

If minority shareholders remain, the parent company will want to extract funds, probably by way of dividends. Again I am told that the Jersey courts give some minority protection, and it would be difficult for the parent company to extract money other than by way of dividends.

Following my correspondence, I have spoken at some length to a representative of the company. I understand that discussions with the parent company were fairly robust. I have reason to believe the independent directors were seeking a significantly higher takeout price. Clearly they failed. without significantly more information, I cannot comment about how strongly they sought to negotiate. however, I was told that money from any deal with NCP would need to be shared with the banking syndicate, who also have a profit share under the terms of the loan agreement, and that by no means all the money would be available to shareholders. However, the representative did concede that it would be extremely difficult for this company to fail under any imaginable scenario of declining property prices.

personally I will be voting against the scheme of arrangement, but I may be in a very small minority. I do believe that this proposal represents extremely aggressive use of a majority shareholding - some incautious souls might suggest it was a form of financial "blackmail". I would also agree with some posters on other aim stocks, that if the stock exchange (or other regulatory) authorities permit this type of restructuring, the aim market should be avoided like the plague. it is impossible for minority investors to have any confidence whatsoever that their interests will be protected.

[kenny] 06/4/2009 16:10

Share trading over the last week may be indicative that we are going to receive a higher offer or someone is building a position to block the bid. However, I stress those MAY occur, it could, on the other hand, just be the bidder sweeping up any shares available for less than 50p.

[flying pig] 27/3/2009 20:30

Not that justice has much chance but ......... letter to one of the parties.



The Independent Directors,
Delek Global Real Estate PLC
Second Floor
Mielles House,
La Rue des Mielles,
St Helier, Jersey JE2 3QD

27 March 2009

Dear Sirs,

I attach a one-page summary of my understanding of the proposed transaction covering the acquisition of the minority shares. If I have any facts wrong please correct me.

You will detect my displeasure. I purchased my shares at significantly higher prices having recognised the underlying value in the company.

Could you answer the following questions please?
1. Is the press report correct? Why did you not give greater details in the 217 page document you circulated?
2. What steps did you take to find an alternative lower cost listing in view of the pressure put by the parent?
3. What legal advice did you take to protect the minority interest? What were you advised?
4. You noticeably fail to make a recommendation, presumably this is due to some slight embarrassment.
5. Is the other large shareholding recently bought by an Israeli company considered part of a concert party? Are you aware if it will be voted in favour?
6. Does Jersey law give any minority protection to investors?

Yours faithfully


FACTS
On 24 March 2009 the Chairman of Delek Global Real Estate Plc (DGRE) a company quoted on the AIM market issued a 217 page document outlining the terms on which Delek Belron International Ltd (DBI) proposes to acquire the shares at 50 pence per share.
The facts of the matter appear to me to be:
DBI presently control DGRE through shareholding amounting to approximately 85%.
The net asset value of DGRE is approximately £1.88 per share, and the price on offer represents a discount of over 73%.
DBI have made it clear that they will remove the London Stock Exchange AIM listing and oppose any dividend payment. The reason given for cancelling the admission of the shares to trading is that the advantages may be outweighed by the costs of doing so. I emphasise the term may be, which is clearly stated in the document - it is not clear that they are.
The independent directors appear to have failed to come up with any suggested proposal for alternative lower cost alternatives to a formal AIM listing. There are many such alternatives. The company came to the AIM market in April 2007 at a price of £2.00 per share. Many people bought shares at significantly higher prices than the offer price, in recognition of both the significant asset value and the strong potential cash flows.
The majority of the long-term debt in the company is non-recourse, and a default would not threaten the viability of the company. The majority of the leases are long and to first-rate credits so there is no significant risk to the company. There are potentially significant cash balances and future cash flows available that would enable dividend payments in the future to be made in line with the originally stated policy, which was to pay out the majority (75%) of profits by way of dividends.
The offer price values the total equity in DGRE at approximately £132.5 million. The net asset value of the company is approximately £498.4 million.
Press reports in Israel made on 24 March – the date of the proposal document - suggest
Quote Delek Global Real Estate is negotiating for £100 million to £120 million in advance payment from National Car Parks of Britain, which leases 127 parking lots from the Israeli company. DGRE belongs to Delek International Belron (81.5%), which in turn belongs to Yitzhak Tshuva's Delek Group (100%). DGRE could use the money to help it meet its liabilities this year and next, when it's supposed to repay about NIS 1.25 billion. NCP would also do well by the deal, because each year DGRE is entitled to jack up the lease price by as much as 3%. This is why the initiative came from NCP, not DGRE, sources near the deal say. Unquote
Source -
The advance payment quoted above on a single transaction represents significantly in excess of 75% of the total valuation of DGRE at the offer price being made to the independent shareholders. The balance of the portfolio remains "significantly undervalued" being bought in by the majority shareholder at the expense of the minorities.
The scheme is a disgraceful example of oppression of minority shareholders by a large overseas controlling parent company. If it proceeds, it does no credit to the advisers, the "independent" directors, the London stock exchange or any of the regulators who are tasked with protecting private shareholders.
I understand under English law that provisions supposedly exist to protect minority shareholders. Why have the independent directors not invoked them?

[kenny] 27/3/2009 19:03

Well done flying pig. I am going to try to make some time to write to a few parties, including the Israeli press.