Delek Glbl Share Discussion Threads

[kenny] 15/5/2009 10:35

The harder they try to buy this on the cheap, the more it confirms that there is value here - look at the first quarter results just out.

[davebowler] 15/5/2009 10:01

Delek Global Real Estate plc

('DGRE' or the 'Company')

Cancellation of the admission of the Company's shares to trading on AIM

Introduction




As announced on 5 May 2009, the Scheme of Arrangement ('the Scheme'), details of which were announced on 23 March 2009, did not achieve the requisite approval from Shareholders and therefore the Scheme will not become effective. In line with previous statements made by Delek Belron International Limited ('DBI') in the Scheme Document, following the failure of the Scheme the Board of DGRE received a letter from DBI on 14 May 2009, which requested that a shareholders' meeting be convened to consider a De-Listing. This letter further stated that in the event that the Board did not approve the convening of a shareholders' meeting to consider a De-Listing, DBI would take the necessary legal steps open to it as a shareholder to convene such a meeting. At a meeting of the board of DGRE at 10.30 a.m. on Thursday 14 May 2009, the Directors agreed that such a meeting should be convened. Consequently, a circular will today be sent to shareholders convening an extraordinary general meeting of the Company and setting out the timetable and details of De-Listing.




Background to the De-Listing




Since the Company's shares were admitted to trading on AIM in April 2007, the price of the Ordinary Shares has fallen significantly and the Ordinary Shares have only briefly traded above their price on admission to AIM. Only a small proportion of the Ordinary Shares are in public hands outside of the control of DBI or Delek Real Estate Limited ('DRE') (DBI's parent company and the direct beneficial holder of 3.5 per cent. of the Company's issued shares), impairing liquidity for the Shareholders. The current economic factors and limited liquidity in the Ordinary Shares have, in the view of the Directors, contributed to the Ordinary Shares trading at a significant discount to appraised net asset value.




Since Admission, the Company has incurred significant costs associated with the admission of the Ordinary Shares to trading on AIM; however, to date neither Shareholders nor the Company have received significant benefits from being a publicly traded company, such as increased liquidity and ability to raise funds. Accordingly, before proposing the Scheme to the Board, DBI informed the Directors that it believed the Company would benefit from returning to private ownership. The Scheme proposals were subsequently set out in the circular sent to Shareholders on 24 March 2009 and were amended by the supplementary circular sent to Shareholders on 22 April 2009. As set out in the Scheme circular, DBI informed the Company before the Scheme was proposed that irrespective of whether the Scheme became effective DBI intended to procure the cancellation of the admission to trading on AIM of the Ordinary Shares.




As a Shareholder holding approximately 81.5 per cent. of the Company's issued share capital, under the AIM Rules, the Company's articles of association and the Jersey Law, DBI is capable of requisitioning a general meeting to approve a cancellation of the admission to trading of the Ordinary Shares and is capable by voting its Ordinary Shares at such a meeting, therefore ensuring that a resolution to approve the cancellation is passed.




Following the Scheme not being approved by the requisite majorities at the meeting of Shareholders held on 5 May 2009 and the Scheme subsequently lapsing, DBI delivered a letter to the Company on 14 May 2009 in which it confirmed that if the Board did not convene a general meeting to consider a resolution to cancel the admission to trading on AIM of the Ordinary Shares it would seek, as the Company's controlling shareholder, to take the steps available to it under the articles of association of the Company and the Jersey Law to requisition such a meeting itself and therefore requested that the Board convene the EGM to seek approval for the De-Listing. In light of the entitlement of DBI under the articles of association of the Company and the Jersey Law to requisition such a meeting by virtue of its shareholding in the Company, the Directors decided after careful consideration at a board meeting held later that day to accede to that request.




The De-Listing and its effect on Shareholders and the Company




In accordance with Rule 41 of the AIM Rules, the Company has today notified the London Stock Exchange of the proposed De-Listing. The De-Listing is conditional upon the approval of the Resolution by Shareholders voting at the EGM holding not less than 75 per cent. of votes cast by Shareholders at such meeting. Subject to the requisite Shareholder approval being received, the De-Listing is expected to be effective at 7.00am on 17 June 2009. DBI has confirmed to the Company that it intends to vote or procure the vote of all of the Ordinary Shares in which it is interested (representing approximately 81.5 per cent. of all the issued shares in the Company) in favour of the resolution to cancel the Company's admission to trading on AIM at the EGM.




Following the De-Listing, the Ordinary Shares will no longer be transferable through CREST and Shareholders who immediately before the De-Listing held Ordinary Shares in uncertificated form will, if they wish to transfer such Ordinary Shares, need to re-materialise those shares.




Following the De-Listing, the Company will no longer be required to comply with the AIM Rules in respect of announcing material events or its results and will no longer be required to comply with the corporate governance requirements applicable to AIM companies. In addition, the Company will cease to comply with the Combined Code on Corporate Governance following the De-Listing. The Company will, however, continue to hold annual general meetings in accordance with the applicable statutory requirements and its articles of association and to continue to send Shareholders copies of the company's audited accounts and notices of any Shareholder meetings.




On De-Listing, the relationship agreement (the 'Relationship Agreement') between the Company, DBI and DRE will terminate automatically. The Relationship Agreement regulates, inter alia, business dealings between Delek Group and the Company and requires there to be at all times a majority of Directors who are independent of DBI and Delek Group. Accordingly, these protections for minority Shareholders will cease to apply with effect from De-Listing.




On De-Listing the Company will cease to have a nominated adviser or a broker.




Transactions in Ordinary Shares following the De-Listing




Following the De-Listing, the Directors do not anticipate moving the Ordinary Shares to an alternative stock exchange in the foreseeable future and, absent any further action from the Company, any transaction in Ordinary Shares undertaken after the De-Listing will only be capable of being undertaken by private sale. Accordingly, the effect of the De-Listing would, in those circumstances, be that the Ordinary Shares would no longer be quoted or tradeable on AIM and Shareholders' ability to deal in their Ordinary Shares readily would likely be substantially reduced. In order to mitigate the effect of the Ordinary Shares no longer being tradeable on AIM, the Company is exploring actively the possibility of affording Shareholders access to an off-market matched bargain facility through which they may be able to buy and sell shares in the Company. If any private transaction in the Ordinary Shares is effected following De-Listing, the parties should contact the Company Secretary at the Company's registered office so that the transaction can be registered by the Company.




Recognising that the De-Listing is likely to substantially reduce Shareholders' ability to deal in their Ordinary Shares, the Company is exploring actively the possibility of undertaking a tender offer for its Ordinary Shares following the De-Listing so as to afford Shareholders who wish to realise their investment in the Company an opportunity to do so. It is intended that any tender offer will be undertaken in accordance with the City Code on Takeovers and Mergers ('the Code'). If a decision is made by the Board to undertake such an offer, Shareholders will be contacted with details of any proposal at such time. On certain future changes of circumstance, such as the place of central management and control of the Company moving from Jersey to a jurisdiction outside the UK, the Channel Islands or the Isle of Man, the Code may cease to apply to the Company from such time.




Extraordinary General Meeting




An EGM is to be held at the offices of DGRE, Second Floor, La Rue des Mielles, St. Helier, Jersey JE2 3QD, at 2.00 p.m. on 9 June 2009, at which the Resolution to approve the De-Listing will be proposed as a special resolution. If this resolution is passed by the requisite majority of Shareholders at the EGM then it is anticipated that the cancellation of the admission to trading on AIM of the Ordinary Shares will become effective at 7.00am on 17 June 2009.

[scorpione] 15/5/2009 09:21

flying pig

My interpretation in reading this morning's statement is that DBI are not obliged to have independent directors on the board once DGRE de-lists.

You may well be right about continuing dividends (unless DBI find some clever way of excrating the cash out for themselves)and there is still some hope for shareholders wanting to cash in with a potential 'grey market' or better still a tender offer but....at what price?

All a little bit uncertain for me as per my previous post, hence happy with my decision to have sold albeit at a small loss.

Best of luck to the remaining holders.

[flying pig] 15/5/2009 08:54

Dividends are very likely to continue for the foreseeable future. The parent company needs the money, and this is the best way to obtain it. The independent directors have a fiduciary duty to all shareholders, and will be particularly aware of their duties to the minority ones.

Therefore alternative ways of extracting funds by the parent company such as making loans would be fraught with problems.

I would not be surprised to see resolutions enabling the company to purchase shares in the market. clearly purchases by the company of their own shares would increase the price of the shares in any grey market that was formed.

the rejection of the derisory offer that was made, has put the parent company into a difficult position.

Like Kenny , I have bought a few more shares because I see this is a moderate risk, but potentially lucrative investment.

[a0469514] 15/5/2009 08:33

Kenny,

This situation is out of my experience.

You seem to be of the opinion that dividends will continue to be made after delisting. If the company is de-listed and no longer needs to support its share price, what is to stop them ceasing to pay dividends in the future.

I see that they are talking about a tender offer for de-listed shares. Do you have any idea on how this would work?

Xylos

[paperclip3] 15/5/2009 08:20

So, Delek are going to force a delisting. However, I believe that even after a delisting they will pay a decent dividend. Moreover, after delisting they may (the statement says) have a tender offer for shares. This should be at a good price, to get rid of the last few non fiendly shareholders.

[kenny] 12/5/2009 15:38

Found the article below. This looks interesting because it appears the holding company is going to resolve it's financing problems through a rights issue (combined with the property sales it has been undertaking). Is this tacit confirmation that DGRE will remain quoted?
=======
Delek Global Real Estate purchase offer fails
Parent Delek Real Estate will raise funds through a rights issue.
Globes' correspondent 6 May 09 11:53

The offer to purchase shares of Delek Real Estate Ltd. (TASE: DLKR) subsidiary Delek Global Real Estate Ltd. (AIM:DGRE) failed yesterday. Delek Real Estate owns 81.5% of Delek Global through Delek Belron International Ltd. (TASE:DLKI.B1), and 3.4% directly.
Delek Global announced, "Scheme shareholders failed to vote by the requisite proportion in favor of the proposed Scheme to implement the acquisition, for cash, of the entire issued share capital of Delek Global (which Delek Real Estate and Delek Belron) do not, taken together, already own."

The company added, "The Court hearing of Delek Global's petition to sanction the scheme will now not take place, the scheme has lapsed and will not become effective."
Shareholders representing 61.12% of Delek Global shares, not including Delek Real Estate and its subsidiary, Delek Belron, voted in favor of the offer to purchase, while shareholders representing 38.38% of the shares voted against it. A majority of 85% of shares was needed to pass the measure.

In a separate announcement, Delek Real Estate plans to raise NIS 120 million through a rights issue. Delek Group Ltd. (TASE: DLEKG), controlled by Yitzhak Tshuva, owns 5% of the company, Yitzhak Tshuva owns 50.72% through his private company Sharon Yitzhak Ltd., and Bank Hapoalim (TASE: POLI; LSE:80OA) owns 9.68%. Tshuva has promised to exercise his rights and buy at least NIS 50 million worth of shares; his direct holding allows him to buy up to NIS 60.8 million worth of shares.

Delek Real Estate plans to use the proceeds of the rights issue to improve its financial position, and increase its liquidity and shareholders' equity. The company faces large premium and interest payments on its bonds and bank loans.

Delek Real Estate offered ₤0.50 per share for Delek Global, which closed yesterday at ₤0.475. The share rose 93% between the beginning of the year and yesterday, although it down 43% over the past 12 months.
Delek Real Estate share rose 7.3% by midday to NIS 5, while Delek Global's share fell 16.3% in early trading on London's Alternative Investment Market (AIM) to ₤0.397.
Published by Globes [online], Israel business news
===========
At 47.5p and with an estimated annualised dividend of 11p per annum, DGRE is trading on a 23% yeild. (Bought a few more shares in DGRE today-it is really difficult to get hold of them at present).

[kenny] 12/5/2009 11:19

It is far from clear that the further purchase by Menora Mivtachim Holdings Ltd is any more than adding to their long term holding.

Looking at the voting figures, it appears they neither voted for or against the bid, therefore, I now have the impression that Delek Bleron's bid was no more than an attempt to draw attention to the extreme discount to NAV that DGRE was trading at; or perhaps a half-hearted bid.

Time will tell but personally, it suits me to retain my shares in order to collect the juicy dividends every six months - if I received a pile of cash on a takeover, I believe it would be rather difficult to find this sort of yeild elsewhere.

[paperclip3] 12/5/2009 08:50

These are the guys who bought a chunk before the announcement some months ago of a possible offer. Upwards and onwards I think.

[grollfam] 11/5/2009 17:13

Great News

Menora Mivtachim Holdings Ltd has bought more shares & is obviously going to hold out for a higher price, thereby aligning their interests with other minorities......

[flying pig] 08/5/2009 17:50

Scorpione.

Clearly it is not without risk and the choice is yours. However, under the legal system there are some protections for minority shareholders. I spoke to the Chairman of the Company last month; he indicated that he believed dividends would continue to be declared as the parent company needed the money. As an independent director, he has an obligation to protect minority shareholders, although this may involve robust conversations with the parent. In his position, I would certainly be looking for legal advice on a regular basis!

There will be a grey market of some sort. Who knows what the "market"price would/will be?

I believe that the minority shareholders will be bought out on more advantageous terms in due course; the parent company certainly does not want the irritation of minority shareholders in an unquoted company.

In reality the parent company can afford to pay near asset value and still have a very good deal. With the benefit of hindsight, they probably accept they pitched their offer far too low, but it seemed like a good idea at the time and it might have worked.

[scorpione] 08/5/2009 16:50

They will not be quoted; its been made plainly clear in the offer document that in the event of the scheme of arrangement offer failing DBI would delist
DGRE. For those that accept an investment in an unquoted company (85% owned by a foreign company) thats fine. For those like me who are uncomfortable with the idea (given that DBI could alter the dividend policy amongst other things) selling now whilst there is a known quoted price is the best option.

[tiltonboy] 08/5/2009 15:29

That's if we are still quoted.

[kenny] 08/5/2009 14:46

After all the excitement of the last few months, we could well drift along until the interim results due in August.

[tiltonboy] 08/5/2009 09:05

Got my divi as well, which is a relief.

[tiltonboy] 08/5/2009 08:29

Spoke too soon.

[tiltonboy] 08/5/2009 08:25

Nice little rise yesterday, and with some chunky bids going on SETS. Nice to see them not getting hit.

[flying pig] 07/5/2009 21:44

Relax chaps I got a cheque this morning. Very nice too.

[topvest] 07/5/2009 21:32

"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 1 May 2009. The DGRE Shares will become ex-dividend on 29
April 2009."

..or as soon as practicable thereafter!

It's not x/d either.

[topvest] 07/5/2009 21:28

I've not received my dividend. Something smells...it was due to be paid on the 5th.

[grollfam] 07/5/2009 16:48

Once the arbs & jobbers are out of the way the shares should go to 70-75p as the insiders put a floor of 50p on the share, and sentiment in the property sector is improving.....

[tiltonboy] 07/5/2009 11:30

Anybody received their dividend yet?

[kenny] 07/5/2009 11:21

From today's FT:

Delek Global Real Estate dropped 15.8 per cent to 40p as investors had their first chance to react to Tuesday's late news that shareholders had voted down a 50p-a-share bid by majority shareholder Delek Belron International. Traders said Belron was unlikely to return with an increased offer and could delist the company.

[topvest] 06/5/2009 21:23

Not sure why they did a scheme of arrangement then, presumably they could just announce a cash offer, given they already have 85% control. All really odd. One way or the other a bid is probably coming and a delisting will probably happen first.