Delek Glbl Share Discussion Threads

[kenny] 13/2/2009 07:22

From an Israeli newspaper today:

"How much natural gas lies in the submarine bedrock at the Tamar-1 site 90 kilometers off the Haifa shoreline remains to be seen, but the latest estimate of extractable gas is 200 billion cubic meters. The partners to Tamar-1 are meanwhile sticking formally to 142 BCM, but industry sources say that's conservative. Meanwhile, the Israeli partners are negotiating financing - they'll need $1.5 billion to $2 billion to develop the site - with an American bank. They don't have to beg: Analysts say Delek Group has received offers from foreign banks. (Avi Bar-Eli)"

[symphonie des grauen] 11/2/2009 09:16

delek group will have to spend capital to exploit its gas find. not sure if that will have any impact on the bid for dgre ie priorities

[a0469514] 11/2/2009 09:03

Kenny,
I am fairly new in this share and I find its relationship with other companies in the group difficult to get my head round. Presumably the gas find does not help directly with the assets of DGRE but does take off the financial pressure from DGRE allowing the company to raise finance to roll over loans without much difficulty. Is that right? If so, it is difficult to see why DGRE should not trade at somewhere approaching its asset value. This of course then means that under the new circumstances, DGRE is now way under valued and a bid at around 50p should be firmly rejected.

Xylos

[kenny] 11/2/2009 08:12

News this morning from Israel that the results of further tests indicate the gas find is even more massive than at first thought, in fact gigantic.

[flying pig] 09/2/2009 18:09

I think they would have difficulties selling a deal at 50p. many people recognise that a reasonably large dividend should still be payable, and where can you reinvest to get a similar return?
The Nomad would be subject to criticism, and the non-executive directors should be taken to one side and shot were they to recommend an offer of £0.50.
needless to say I have not had a response to my e-mail to the company.

[unionhall] 09/2/2009 17:10

only £130k -

seems more likely people happy to take cash at 47p than wait weeks to get 50p (6% difference.) imho

[grollfam] 09/2/2009 16:58

Dropping price is indicating that the insiders are aware that an offer of 50p will not be acceptable to minorities. I predict that Delek Real Estate in Israel will either withdraw their intial offer or up it to at least 3 figures....

[paperclip3] 05/2/2009 08:58

Dlek's decision to take DRGE back into private ownership seems to have followed its discovery of a major gas field off Israel (which may well transform Delek's fortune). Given Delek's new financial self confidence, and the cash flow form DGRE itself, is an increased bid to mop up the small remaining number of "independent" shares not a real possibility?

[grollfam] 05/2/2009 05:27

Kenny, I do not think they need Roadchef deal to proceed. There is free cash of £54 million as at 30 September (see 3rd quarter results) in DGRE and to expropriate minorities @ 50p will only cost 20 million pounds to buy the roughly 40 million shares owned by minorities including the 12 million bought by their friends in Israel a few days before the approach.....

[kenny] 04/2/2009 11:33

Last few days price action in Delek Real Estate in Israel may be suggestive of the fact Roadchef is likely to sell. Therefore, I suspect the bid for DGRE will indeed proceed.

One hopes the Independent Directors will insist that a decent price is paid.

As the management is almost identical for both companies I also believe there cannot be much due diligence to do!! So announcement of agreed price and terms may only need to await the Roadchef deal getting signed.

[flying pig] 03/2/2009 10:28

I have certainly e-mailed the non-executive directors reminding them of their fiduciary duty.
In theory they should be able to argue that we can reinvest any proceeds at a similar yield - that could be a big hurdle to jump.

[symphonie des grauen] 02/2/2009 10:53

'youth is wasted on the young'..say's irish homo poet who enjoyed the tasty morsels of a youthful buck..flesh creeps

[grollfam] 02/2/2009 10:29

I can wait, I am a young man !!!!!

[symphonie des grauen] 02/2/2009 08:41

though i do confess that the bid does seems a tad opportunistic but i need the cash NOW so patience is not a luxury i can afford to indulge

[symphonie des grauen] 02/2/2009 08:40

i suppose i can always buy back in should a bidding war ensues!

[kenny] 02/2/2009 08:39

I believe that Menora Mivtachim Holdings Ltd is a CONCERT party and should therefore not be allowed to vote it's shares. It is very suspicious that a few days before the date it is 'claimed' that DGRE is first approached with a bid, that company massivily increases its holding.

Be aware, that it or the holding company may be in the market in coming days buying up shares at under 50p - subsequently they make an offer of more than 3 figures - knowing they will only have to pay that price for very few shares.

I am not selling any of my shares in the market, pending an increased offer - note this morning's announcement uses the phrase "indicative offer price". I think that leaves plenty of scope for improvement.

[symphonie des grauen] 02/2/2009 08:05

had a few from 23p so sold at 50p for an OK profit

[grollfam] 02/2/2009 05:53

Kenny,

I agree with your comments. Delek have a history of putting their feet in their mouth !!!!Late last year Delek Real Estate retreated from its attempt to swap new bonds for certain series of the company's older bonds - an offer that would have constituted a substantial loss for bondholders. The new bonds would have been backed by the income from high-quality properties in Israel, but would have entailed a 35-42% loss on the face value of the original investments - which are now trading at junk levels.

Lets wait for an official statement about an offer. I think between 1 pound & 1.25 is where this will end. The GOOD NEWS is that DGRE is now in play and other bidders will emerge if the offer is below 3 figures.

PS: is Menora Mivtachim Holdings Ltd a"RELATED PARTY" ????????

[flying pig] 02/2/2009 05:03

Kenny
I agree 50p would be a disgrace. Why should investors sell when the dividend yield should be 10%+ under almost any conditions? The non-executives have a duty to ALL shareholders not just the largest.

[kenny] 02/2/2009 00:46

The independent directors have a legal duty to minority shareholders in these circumstances.

This is an investment company so, unlike a trading company, it is not that difficult to ascertain the value per share. Put another way, why has the holding company offered 50p why not 49p or 51p (or 128p or 217p)?

The offer is not based on NAV so must be rejected - it really is that simple. If the bidder does not then come up with a reasonable offer, the bid is off and DGRE remains as a quoted company. It will then hopefully decide it can afford to keep paying dividends of about 11p per annum.

As an aside, if the holding company can afford to bid for the 15% of the company it does not own, it can certainly afford to immediatly repay the £6m loan it took from DGRE. Add in the £4m from the recent property sale and the £10m would cover 4p of the 5.5p next dividend - and that ignores net rents of a further 5.25p (£13.9m) which have been received since the last dividend was paid.

About £20m is all that the holding company is currently offering for the 15% it does not already own - so that puts in context not only how low the current offer is but also highlights the fact that the holding company would, in effect, use DGRE's own resources to buy out that 15%.

I am coming to the view this is not a serious offer for DGRE so the likely outcome is that DGRE remains a quoted company.

[topvest] 01/2/2009 10:54

I think they will. Despite buying at 93p, I would accept 50p. The world has changed, and leveraged real estate is not the place to be!

[kenny] 01/2/2009 10:28

The article below today confirms the initial offer of 50p which I do not think the independent directors will accept, certainly not if they act with independent minds:

DGRE offer will lead to AIM delisting
Delek Global Real Estate owns stakes in properties and companies in the UK and elsewhere in Western Europe and Canada.
Globes' correspondent 1 Feb 09 11:35

Yitzhak Tshuva's Delek Group Ltd.'s (TASE: DLEKG) European real estate arm, Delek Global Real Estate Ltd. (AIM:DGRE) received an offer to acquire the 15% stake in it that is not already owned by Delek Real Estate Ltd. (TASE: DLKR).
Delek Real Estate owns 85% of DGRE through wholly owned subsidiary Delek Belron International Ltd. (TASE:DLKI.B1).

The offer was for ₤0.50 per share, over 25% above the Delek Global Real Estate market price at the date of the offer.

The deal, if it goes through, will lead to Delek Global Real Estate being delisted from London's AIM.

Delek Global Real Estate owns stakes in properties and companies in the UK and elsewhere in Western Europe and Canada, some of them in partnership with Igal Ahouvi's Blenheim Properties Group Ltd.

Delek Global Real Estate rose 10% on Friday to ₤0.44, giving a market cap of ₤116 million. The share more than doubled since the beginning of 2009, but has lost over half its value since January 2008.

Delek Group's share rose 3.9% in morning trading to NIS 287.20, and Delek Real Estate's share rose 0.3% to NIS 3.89.

Published by Globes [online], Israel business news.

[kenny] 31/1/2009 13:16

We may need to mobilise against an initial "low-ball" offer of 50p per share from the holding company. According to a filing by Delek Real Estate in Israel, their initial offer may be at 50p - if my translation of the Hebrew text is correct.

I have emailed the company and copied Panmure Gordon, strongly urging the Independent Directors to refute such a low offer, if the offer is indeed at that level. Panmure Gordon can hardly issue a note on 16 January 2009 with an estimated NAV of 217p, stating BUY and a price target of 128p and then a few weeks later - in their capacity as advisors to the independent directors - sanction a 50p per share takeover.

To reinforce the point I urge all shareholders to contact the company by email - web-site - - and make their views clear asking them to be passed on to the Independent Directors.

I am sure Panmure Gordon cannot advise the Independent Directors that an offer at 50p represents fair value but it may be as well to put your views on record at an early date to reinforce the point. The approach may be "very preliminary" and an offer at 50p will be rejected but it is important to make our views clear - perhaps pressing for a price equal to the 128p which gives shareholders the highest price for over 12 months but also gives the purchaser a 41% discount to NAV.

Please post back if you do email so we all know how many have been sent - and any response albeit you may not hear back as the company is precluded from commenting other than to the whole market.

[isa23] 31/1/2009 12:44

I wonder how much of these expectations are realistic & how much just wishful thinking. 200p would be great, but the last published NAV is history and there are lots of other highly indebted property companies trading at even more distressed prices (rty, cpt, atls...). Assets have fallen about 20-30% since summer, and likely to fall further. The company is also highly geared. At the moment there are lots of distressed sellers and it's a buyer's market, so I'd say dgre's chances of a receiving a fair play isn't that great. Sterling weakness does help, but it is beginning to strengthen against euro now. All in all, I wouldn't be too greedy.

[schlemiel] 31/1/2009 11:31

as long as the takeout price is greater than the current mkt price then i'm happy. there as been stakebuildin though recently cos that is why i bought in.