Delek Glbl Share Discussion Threads

[paperclip3] 31/1/2009 11:28

Another angle on all this, and at what price a takeover bid may be pitched, is the relationship between Delek and Israeli businessman Igal Ahouvi. Ahouvi has been in many a joint venture with Delek in respect of real estate purchases. When DGRE was about to come to market in 2007, Delek found, late in the day, that they were short investors. Accordingly, the AIM listing was in danger of withdrawal. Upon request from Delek, Ahouvi purchased £14.5 million of shares from the underwriters, at £2. So what happens now? Will Delek bail out their long suffering pal at a good price (for him), or could there be another scenario which would be less palatable to other shareholders?

[fackson] 31/1/2009 07:21

so i wonder if mondays open will be?

[kenny] 30/1/2009 21:42

... also, Panmure Gordon can hardly issue a buy note on 16 January with a 217p NAV and price target of 128p and then a few weeks later - in their capacity as advisors to the independent directors - sanction a 75p per share take out price.

I think the FSA would have something to say about that.

[kenny] 30/1/2009 21:23

topvest - net earnings per share are predicted to be 11.39p in 2008 and 11.27p in 2009 so 200p is a 5.7% yeild in a low interest environment.

They would know they are wasting their time and costs with an offer as low as 75p - the shares were trading over that level not so long ago. Holders would vote it down and bear in mind they are not allowed to vote their 85% holding.

Do not forget they are only paying for 15% of the company in cash so it is an £80m cost at 200p - they are to receive about £150m net of loan repayments from the sale of Roadchef so the cash is available to them.

For me to give up an annual income of 11p for 75p capital is just out of the question - and the bid talk confirms they can afford to keep paying out those dividends.

Time will tell!!

[topvest] 30/1/2009 20:56

200p....you must be joking! It would be great, but it's not going to happen. 50-75p is more like it!

[schlemiel] 30/1/2009 20:32

why as the price reaction been so subdued?

[kenny] 30/1/2009 20:22

A bid for DGRE was an unexpected turn up for the books!

Looks like a bid from the holding company so the big question is whether they are going to play fair and give us full NAV.

The brokers, Panmure Gordon who it is stated in the announcement are solely acting for DGRE, only very recently, on 16 January, issued a 2008 year end NAV of 217p.

I hope and expect them and the independent directors not to be bamboozled into a low-ball offer and they should press for a price equal to full NAV plus the dividend which has accrued since the last one was paid almost 6 months ago. Otherwise, we should remain as a quoted company and await an upturn in commercial property values.

As often stated by DGRE, their properties are prime real estate so any offer to take over the company should reflect this as well as the increase in the Euro against Sterling. Bering in mind that the Israeli Shekel has also massively improved against Sterling in the recent past, a buyout of DGRE by the holding company is a smart move at this time. However, I hope they and the independent directors recognise that shareholders should be treated fairly – even if they are a minority. Mr Yitzhak Tshuva, the majority shareholder in Delek Group, has a reputation of treating shareholders fairly and I am sure he would wish to do so in this instance.

Bear in mind that DGRE only floated in March 2007 at 200p per share when they issued about 55m shares and raised £110m in cash. An offer at the float price of 200p would probably be a fair compromise all round.

[tom.muir] 30/1/2009 16:27

Possible Offer:
RNS Number : 5740M Delek Global Real Estate PLC 30 January 2009

30 January 2009

Delek Global Real Estate plc

('DGRE' or 'the Company')

Statement Re: Preliminary Approach

DGRE notes the recent movement in its share price. DGRE confirms that on 28 January 2009 it received a preliminary approach regarding a potential offer for the Company.

The approach is very preliminary and there can be no certainty that an offer will be made nor as to the terms on which any offer might be made.

A further announcement will be made in due course, as appropriate.

Pursuant to Rule 2.10 of the City Code, DGRE confirms that it has 265,115,168 ordinary shares of 50 pence each in issue and admitted to trading on the London Stock Exchange (ISIN JE00B1S0VN88).

For more information, please contact:

Panmure Gordon & Co

Hugh Morgan

Christopher Bucknall

[brigand] 30/1/2009 16:05

Very interesting!

[schlemiel] 30/1/2009 12:30

looking good again..added a few more..looking for 50p

[kenmitch] 30/1/2009 09:28

Excellent well argued and reassuring posts Kenny. Many thanks.

Bought mine above the current price but as an intended long term buy and hold.

If I was convinced the dividend would be anywhere near the level you think is still a possibility I would buy more even after the recent surge in the share price as the yield would surely support a significantly higher share price?

But as you say there can be no certainty about future dividends.

[kenny] 29/1/2009 15:12

Schlemiel - you could be correct about either the same or another party building a position. Also, I have noticed that for the last 7 or more's days, the trading mainly occurs in the period from the open until about 2pm - all the trading after that normally consists of small selling by private investors.

This may indicate that the buyer(s) come from another time zone - east rather than west - so another Israeli institution?

Probably totally irrelevent to speculate who is buying but there does seem to be a pattern of pretty determined buying (which also gives me confidence DGRE is going to maintain dividends).

[schlemiel] 29/1/2009 12:59

great strength after this morning's pullback..someone's building a position here..i can see it in the price

[kenny] 29/1/2009 08:17

ISA23 - it is indeed about a 30% prospective yeild at the current share price. However, please bear in mind that I am speculating that the dividend will be maintained at the current level.

I am sure you will appreciate that the dividend could be reduced or cut altogether, we will not know until the results are out. I believe there is a very good chance that the dividend will be maintained, for the various reasons stated in previous posts, but I await the final results and dividend announcement. Perhaps there is an additional reason to suspect that the dividend will be maintained - a reason not mentioned by anyone in earlier posts - I doubt the Israeli institution that recently increased it's holding to 4.55% would have done so if they believed that bad news was in the pipelne.

[kenny] 28/1/2009 16:02

Further to my post earlier today, this related company news may also be helping DGRE;

Delek gets 6 bids for UK RoadChef
Delek is selling RoadChef for its purchase price just two years after buying it.
Avi Shauly 28 Jan 09 14:44

Sources inform ''Globes'' that that Delek Group Ltd. (TASE: DLEKG), controlled by Yitzhak Tshuva, has received six bids in the tender for UK motorway restaurant and inn chain RoadChef. Sale manager NM Rothschild and Sons has not yet closed the tender because one bidder asked for a few days' delay. Delek is reportedly asking the same price at which it acquired the company.
In the next phase, two or three finalists will be allowed to begin due diligence, with the deal's completion anticipated in March.

RoadChef operates 29 sites with 25 gas stations and 15 inns of the Premier Inn chain, restaurants, cafes, and convenience stores. Delek Group acquired RoadChef in March 2007. Delek Real Estate Ltd. (TASE: DLKR) subsidiary Delek Global Real Estate Ltd. (AIM:DGRE) acquired 75% in the chain for ₤158 million, at a company value of ₤217 million, and Delek Petroleum Ltd. (TASE: DLKP.B7; DLKP.B8) acquired the other 25%. Delek Real Estate financed part of the acquisition with a $150 million loan from Merrill Lynch.

If RoadChef is sold for its purchase price, Delek Real Estate will report no capital gain on the sale, but the proceeds will enable the company to substantially reduce its $1 billion consolidated debt. Meanwhile, Menorah Mivtachim Holdings Ltd. (TASE: MORA) boosted its stake in Delek Global Real Estate to 4.45%, becoming a party at interest in the company.

In December, Delek Real Estate CEO Ilik Rozansky unveiled the company's sell-off plan of properties worth more than NIS 1 billion over the coming year. Rozansky is seeking to reduce the company's debt, and he has obtained the support of shareholders and bondholders. Delek Real Estate's financial report for the third quarter states that the company's short-term liabilities totaled NIS 4 billion at the end September 2008, and its long-term liabilities totaled NIS 17.7 billion.

Delek Global Real Estate rose 4.7% on London's Alternative Investment Market (AIM) yesterday to ₤0.335, giving a market cap of ₤88 million. Delek Real Estate's share rose 3% in early trading today to NIS 3.57. Delek Group's share rose 2.6% to NIS 289.20.

[isa23] 28/1/2009 15:43

Thanks Kenny. That's a 30% yield at current price, at a time when inflation is zero and bank rates heading to zero!!

[kenny] 28/1/2009 14:55

Here is my analysis, for anyone that may be interested, of the reasons for the spike in DGRE's share price that has occurred since the very large gas find off the coast of Israel was announced - by a partnership that includes Delek Group subsidiaries.

The gas find probably means that Delek Group and its subsidiaries will be able to roll over their loans and bonds as they fall due and that they will be rolled over on reasonable and not expensive terms. All of this seems to be confirmed by the fact that the quoted bonds in Delek Group have leapt by 70% this month, since the gas find was announced, from their previous junk status. Although this gas may not be pumped for three or more years, this find also confirms that other exploration rights, nearby and also on the same line to Cyprus, held by Delek Group subsidiaries also have substantial potential value

Given that background, I now turn to possible explanations for why the DGRE share price has powered ahead in such a short period of time, once again, since the gas find was announced. In relation to assets, the broker has predicted a NAV of 217p at 31 December 2008. Despite having a large shareholding in DGRE, even I find that too high a figure to contemplate. However, even a value of 150p, say, is a multiple of the current share price.

In relation to dividends, based on the above assumptions, it would appear reasonable to assume that DGRE can keep paying out a dividend of about 11p per annum, that is 5.5p every six months. On this basis the yield is very attractive, if that is not an understatement!

I wish the above lateral thinking had occurred to me when the share price was about 25p rather than today's level. Nevertheless, I have bought some more today because, if the above analysis proves correct, even today's share price is cheap in the extreme.

Please note that none of the above is intended as advice and each investor must do their own research. I am a long term investor and do not believe that a company like DGRE, with limited availability of stock and wide spreads, should be bought with a short term horizon. From a long term perspective, DGRE suits my requirements of good income with capital return a secondary consideration (it has to be in these times of falling commercial property values!) because I do not need access to the capital for a minimum of 5 years and more likely 10 years.

I hope my comments provide some degree of assurance for holders who bought shares in DGRE at much higher levels, like me, but be wary of all posts on bulletin boards, including mine as I am "talking my own book" and many people these days are not investing but speculating for a day or a week.

[schlemiel] 28/1/2009 11:33

just joined with 6250

[fackson] 26/1/2009 21:01

Would be good to get the news line added to the header .....

did not see this until tonight..

RNS Number : 2089M
Delek Global Real Estate PLC
26 January 2009

Delek Global Real Estate PLC

('DGRE' or 'the Company')

Significant Shareholders

The Company was notified on 25 January 2009 that Menora Mivtachim Holdings Ltd. now holds an interest in 11,794,030 Ordinary Shares in the Company, representing approximately 4.45% of the current issued share capital of the Company.

DGRE's issued share capital consists of 265,115,168 ordinary shares of 50 pence each with voting rights. No ordinary shares are held in treasury. The above figure of 265,115,168 may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, DGRE.


- Ends -

[kenny] 26/1/2009 17:20

I would NOT welcome a bid at these sort of prices, especially as the house broker is predicting a 31.12.08 NAV of 217p. I would rather collect the dividends for the next few years' until commercial real estate recovers.

Delek Real Estate may also feel its funds are better used in buying in its own bonds as any bid for DGRE that is substantially below NAV is likely to be resisted.

I prefer the thought that the Israeli insurance/investment institution has invested for its funds - for income but also value attractions, including weakness of Sterling.It is already showing approximatly 10% gain on it's one week old investment.

Only time will tell!!

[grollfam] 26/1/2009 17:00

good news that a big financial institution has now bought nearly 5% of DGRE. This means that 2 Israeli groups now own more than 90% of the company and a BID for the 10% minorities cannot be far off !!!!

[fackson] 26/1/2009 13:54

this looks interesting - picked a few up at 26p.... the volume around the 19/20 looking good.... a break above 32ish would give next support/resistance at 50ish...

[flying pig] 26/1/2009 08:55

press over the weekend reported that road chef might be sold. Looks like they will not get the price originally paid.

Perhaps gives extra emphasis for dividend payments upstream.

[bitochon] 23/1/2009 15:09

hello schlemiel. i hold a few of these. hope the investment won't end up like a schlemazel!