Delek Glbl Share Discussion Threads

[kenny] 06/5/2009 14:44

Personally, I do not mind being locked into an unquoted company. I am quite familiar with how unquoted companies operate and also do not make short term investments. However, I do understand that most people will not albeit I think it just as likely that DBI will come back with a higher bid, at a level that secures the Director's support. (I do not know if DBI have to wait 6 months before being allowed to bid again?).

As to the share price collapsing, please look at the example of MAY where the share price shot up, all the way to de-listing.

Dividends are in the bag because DGRE is in a much better financial position than its holding company. Also, there is discussion with a buyer relating to a potential large property disposal.

[tiltonboy] 06/5/2009 11:40

Problem is if they decide to de-list. Shares will be sub 30p before you know it, and those that remain will be locked in. I'm not so certain that any dividends will be paid.

[flyinghog] 06/5/2009 11:28

buying at under 40p would be a real deal.

[a0469514] 06/5/2009 09:27

topvest,
The parent company could not vote on the deal as it was the bidder. The vote had to be the required majority from the 15% (or so) independent shareholders as I understand it. So for once, the private shareholder had a lot of power. I was still surprised that the deal got turned down though, not because I thought it was a good deal but because I thought that the usual complacency of shareholders would allow it to go through. Kenny doesn't think they will go through their threat to de-list. We will have to wait and see.

Xylos

[topvest] 06/5/2009 08:45

This all seems one almighty mess. I'm confused as to why they couldn't get this through given that DRE owns 85% - must be some split amongst the complex Israeli shareholders. All rather odd. Risk is that the company now gets delisted I suppose.

DBI is a 100 per cent. owned subsidiary of DRE. DRE is listed on the
Tel Aviv Stock Exchange and as at the date of this announcement, controls 85.0
per cent. of the DGRE Shares through a direct holding of 9,363,500 DGRE Shares,
representing 3.5 per cent. of DGRE's issued share capital, and through DBI's
holding of 216,070,613 DGRE Shares, representing 81.5 per cent. of DGRE's issued share capital. In addition, the Interested Directors are beneficially interested in 24,500 DGRE Shares and Eran Meytal and Izhak Gidron, directors of DBI, are beneficially interested in 23,000 and 20,000 DGRE Shares respectively.

[stupidboypike] 06/5/2009 08:31

flying pig. Many thanks, may wait a little longer then!! Best regards SBP

[flying pig] 06/5/2009 08:28

Went ex-div last month due to be paid yesterday so in bank account this week.

[stupidboypike] 06/5/2009 08:20

Hi,

Can anyone tell me is the 7p divi still being paid if so when does it go ex-divi? I don't hold but have been watching for a while. May buy a few at some point .

Best regards

SBP

[grollfam] 06/5/2009 07:24

Need to get Annual Report & grill directors at the AGM.......

[topvest] 05/5/2009 21:40

Hmm..surprised it didn't go through to be honest. What next?

[flying pig] 05/5/2009 17:54

Well I believe it was the "fair" result but the shameful proposal will have cost the shareholders as a whole a fortune in legal & professional fees. Did the Board made them contingent on success or get an indemnity from the major shareholder to cover these unwelcome and unnecessary costs?

Now they have a chance to get real and make a sensible offer.

The good news is that the parent wants dividends up-streaming!

[kenny] 05/5/2009 17:17

Scheme to steal our shares for 50p has been defeated!! Looks like some of the very big shareholders voted against it.

I suspect the rather dodgy plan to delist will not be put to shareholders - if pushed through it would cause a panic of other minority shareholders in Delek Group companies quoted in Israel and the US.

Looking forward to collecting dividends for many years to come, hopefully, but will consider any properly priced offer to take the company private.

[kenny] 24/4/2009 11:42

Anon - your opinion is well argued and relevent. Can I suggest you look into the detail of the valuations. UK offices have had a big writedown in DGRE - a peak to December 08 reduction in value of 20.7% - see 2008 accounts page 4.
The factor that reduces the percentage fall accross the whole portfolio is the precise nature of the lease agreements on the car parks and hotels - the indexing of rents. You can also view each valuers detailed report in the scheme of arrangment document via the website at www.delekgre.com - on the news page you can download the 2008 accounts and the scheme of arrangement document.

There are different firms of valuers for different parts of the portfolio so I do hope you accept that they cannot all be coming up with dodgy valuations!!

[kenny] 24/4/2009 10:38

If you are a shareholder who does not wish the takeover at 50p to proceed and wish the Court in Jersey to hear your views, you need to write a letter to the solicitors mentioned in the document, namely:

Carey Olsen, 47 Esplande, St Helier, Jersey JE1 08D, fax is 01534 887744, attention of Mr G Coltman. Email address for Mr G Coltman is on the Carey Olsen website. If the independent directors agree, your views will probably be presented to the Court.

The more people who vote against and ALSO express their views the more chance this will be abandoned or the much higher offer proposed by the independent directors will be agreed. Do not be concerned about the threat to delist - I think it an empty threat because if they do it, it will cause mass panic in the other subsidiary companies quoted on the Israeli exchange, on concern that it might occur to them.

YOU NEED TO SEND YOUR LETTER QUICKLY AS TIME IS NOW VERY SHORT.

[topvest] 23/4/2009 20:35

Anon - I think that is a fair assessment. 50p + dividends for me gets me to only a small loss on my original investment. This could easily go back to £2 NAV or go bust.

[anon] 23/4/2009 13:15

flying pig, I am not an employee of the advisers, I am a shareholder stating my view on this thread.
20p was the where the share had been before the takeover was announced and that's where it will go again if the deal falls through.
Looking at the Dec 08 accounts the company recorded a loss of 39p a share of which £93 million was in derivative swaps alone.
The reported NAV of 188p overstates the true picture since commercial property prices have fallen since the last revaluation, a drop of 25% from the last revaluation would make the NAV less than zero and the shares worthless.
The company has 1.7 billion in bank loans which need rolling over in the the next few years and the cost of finance will be rising, with over a billion in interest rate swap derivative contracts, what is the solvency of the counterparties to those contracts and was the 93m loss a one off or will there be more to follow ? The world has changed, markets are uncertain and debt based property business models like this are risky, they are not the steady dividend paying safe assets you imply.
I am going to vote yes for the scheme. Minorities are not being bullied, we are being offered a chance to get out with the certainty that comes from cash. 50p plus 7p div seems a reasonable price for me to sell my shares at and let someone else take on the risks and potential rewards which will come from holding shares in an unlisted property company.
That's my opinion.

[flying pig] 22/4/2009 17:23

Announcement looks as though the offer continues at 50p with the sweetener of the dividend. while this is a modest improvement it is nothing like fair value.

I still propose to vote against!

[flying pig] 21/4/2009 21:25

Kenny.

I agree with your analysis above. The dividend stream should be significant. There will be a grey market, even if the listing is withdrawn.

The Court may well not agree if we make a sensible case against - notwithstanding any shareholder vote. Minorities are being bullied.

The suggestion of 20p is probably from an employee of the advisers to the parent trying to encourage a timid yes vote.

Has anyone found another similar scheme without a directors recommendation?

Flying pig

[kenny] 21/4/2009 14:13

An earlier post expressed the view that if the buyout at 50p is withdrawn, the share price will collapse.

I am guessing that in view of the share price recovery of the property sector that DGRE has not participated in: the DGRE share price will rise if the bid is withdrawn!! DGRE will be able to "catch up" with the rest of the property sector e.g. it is the low buyout offer that is holding back the price from rising above it's current discount to 31.12.08 value of about 72%. As far as I am aware, no other company in the property sector is trading at such a massive discount.

Of course, I acknowledge the fact that if the buyout fails the initial share price reaction may well be downward but I think it will then correct upward - the holding company needs the dividend income so DGRE will need to keep paying dividends. I am also guessing that the independent directors will insist on retaining the quote - if Delek try and delist, when news of that reaches Israel it could trigger a panic in the Israeli quoted subsidiaries of the holding company.

An 11p - fully covered - annual dividend at a 53p share price is a yeild of 20.75% so I am guessing the scope for the share price to fall may be limited.

I have also "stress tested" the NAV of 188p per share at 31.12.08 and conclude that it is not excessive. Gross rental income was £164m on a valuation of £2,403m giving an implied rental yeild of 6.82%. That is not excessive albeit the average yeild has probably moved out since December 2008. The large fall in NAV in 2008 was mitigated by Sterling depreciating - a one off benefit of about 11p per share which may reverse over time. However, even after discounting for all of the above, current value probably exceeds 168p. Even putting an ultra conservative valuation on everything - which also means ignoring the £100m plus offer they have received for the NCP income stream - I struggle to see why a shareholder would accept anything less than 150p per share. I also think DGRE is by far the most vauable part of the Delek Real Estate sub-group.

For all of the above reasons, I am going to vote against the revised buyout proposal and continue to campaign to ensure that either it is abandoned or that the offer is revised to 150p per share. I think the threat to de-list is an empty threat but I am willing to hold shares in an unquoted entity because of the likely attractive dividends and also the hope that, eventually, the holding company will seek to buy out minorities on acceptable terms.

[kenny] 20/4/2009 23:54

I have this evening emailed two Israeli newspapers with details of the low buyout offer and Israeli fund manager buying 4 days before the offer was announced in the hope they will report the situation.

If this 50p offer goes through minority shareholders in Mr Yitzhak Tshuva's other companies quoted in Israel can surely expect to be treated in the same manner. I am holding DGRE in the hope that a higher offer can be squeezed out – if only so that Mr Yitzhak Tshuva can save face.

Also here is a report of another property sale and that the holding company has raised lots of funds recently:

Apr 19, 2009 (Globes - McClatchy-Tribune Information Services via COMTEX) -- Yitzhak Tshuva's Delek Group Ltd. (TASE: DLEKG) subsidiary Delek Real Estate Ltd. (TASE: DLKR) has sold the 4,900-square meter railway compound lot in Jerusalem for NIS 25 million to the independent supermarket chain Rami Levi Chain Stores Hashikma Marketing 2006 Ltd. (TASE:RMLI). This is double the NIS 12.8 million value of the lot listed in the company's books. The company will report a pretax capital gain of NIS 21 million on the sale.
The lot is leased to road services company Shagrir Ltd. as a logistics center for NIS 500,000 a year.
Delek Real Estate CEO Ilik Rozansky said, "We're selling the property for twice its book value. We believe that the return is worthwhile given the property's redevelopment potential, albeit which is only in the long term and uncertain. This is the latest transaction by Delek Real Estate in recent months, in which the company has sold properties for more than NIS 800 million as part of its strategy to sell assets and increase its liquidity. These properties have been sold at their book values."

[grollfam] 19/4/2009 11:30

DGRE dividend will help fund its delisting
Delek Global Real Estate reversed an earlier decision not to distribute a dividend.
Erez Wollberg 19 Apr 09 10:33


Yitzhak Tshuva's Delek Group Ltd. (TASE: DLEKG) Delek Global Real Estate Ltd. (AIM:DGRE) will distribute a dividend of ₤0.07 per share, or ₤18.5 million altogether, despite posting a loss of ₤135.7 million in 2008.
Delek Group controls Delek Global Real Estate via Delek Real Estate Ltd. (TASE: DLKR) subsidiary Delek Belron International Ltd. (TASE:DLKI.B1).

The move represents a reversal of an earlier decision not to pay a dividend following the company's loss in 2008. Delek Global's board reversed its previous decision after discussions between its independent directors, certain minority shareholders, and Delek Belron.

Delek Global's dividend proceeds will help Delek Real Estate desist Delek Global from London's Alternative Investment Market (AIM), which will cost ₤19.8 million. Delek Real Estate's share of the dividend amounts to ₤15.1 million, and will have to make up the balance from its own resources.

Delek Real Estate stated in the offer to purchase that it will use its credit line from Israel Discount Bank (TASE: DSCT) to finance the deal.

Delek Global Real Estate stated on Friday, "This dividend will be payable on 5 May 2009 (or as soon as practicable thereafter) to those DGRE shareholders whose names are on the register at the close of business on May 1, 2009."

Delek Global Real Estate also announced that it would seek to postpone a court hearing concerning the offer to purchase, scheduled for April 22.

Delek Global Real Estate closed at ₤0.50 on Friday, giving a market cap of ₤132 million, after rising 6.4%. Delek Real Estate's share rose 1.1% in early trading on the TASE today to NIS 4.75.

Published by Globes [online], Israel business news - www.globes-online.com - on April 19, 2009

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

[flying pig] 19/4/2009 09:39

Anon (and topvest)

you are wrong - 20p no chance!

Good assets, non-recourse funds, decent leases, worth 150p + (though we are unlikely to get 150p). I would show a big loss at 60p as bought after decent analysis of company at higher levels.

Company could buy in minority shares in the market out of cash flow if not de-listing and if de-listing buy in the "grey market".

[anon] 18/4/2009 20:54

I agree, I will accept the offer. If the takeover fails then this is going back to 20p or lower especially if serious deflation gets going and we end up with another great depression. The company has too much debt.

[topvest] 18/4/2009 09:36

Yes, all very interesting. Happy to bag the 7p dividend and get out at 50-60p personally.

[grollfam] 18/4/2009 05:52

Agree with Kenny.

The company has prime assets, non-recourse finance to the holding company, and good sustainable cash flows enabling regular dividends to be paid,all the basics for a good long-term property investment, but think they can get away with expropriating the 15% minorities at the bottom of the cycle by threatening to de-list off AIM & stopping dividend payments, both moves which destroy shareholder value.....

They must have some major problem/legal issue after being so brazen, suddenly decide to resume dividends to ALL shareholders. Perhaps the loan they took from DGRE will be found by a judge at the scheme meeting to be against company law, or maybe some suspicious blocks of shares traded by Israeli institutions 3 days before notice of "approach to company of offer" must be a worry to Delek in Israel.

Makes one curious.....