Recanati family fire sale - כללי - TheMarker

Recanati family fire sale

When the big guys hold a garage sale, only already annointed tycoons need show up

It started a little less than one year ago: the most prominent figure in the IDB family suddenly ammounced he was tierd of Israel, was moving to Switerland, and would like to sell his stake in IDB Holdings. But today it is clear that this is not just Oudi Recanati's personal move, but a Recanati fire sale and divestment of all of their joint holdings.

The IDB empire was founded by Oudi and Leon Recanati¿s grandfather. Despite their Italian surname, the family emigrated from Greece and opened Discount Bank in Israel, developed investments in business concerns, opened a bank in Switzerland and an international shipping company. Second generation family m embers Rafael and Danny Recanati continued to nurture the empire which, with the Israeli economy, grew up to be Israel's largest business concern. The Recanatis became Israel's reigning business royalty, careful to donate to the community, the arts and academic institutions.

But the third generation, primarily Oudi and Leon Recanati, can't seem to cooperate. The two were never considered close, and after Oudi decided to leave Israel and take his assets with him, there was no choice: the entire empire, hit hard in the 80s by the bank share scandal which took the family¿s control of Discount Bank, was put up for sale.

The first significant asset up for sale was the IDB concern. In the first round, one of the cousins, Leon, tried to by the other ones¿ shares and preserve the dynasty. Leon failed ¿ the deal he cooked up with Kardan collapsed and the ball was back in Oudi's court ¿ and this time it was clear that everyone would sell and the Recanati name would no longer appear among the parties at interest. After the collapse of the Kardan deal, it looked like the market was so bad that no buyer could be found for the concern, and the family's fate would be to cooperate a few more months or even years. The new talks with Nochi Dankner prove that Oudi is resolute to sell even at a much lower valuation than he had originally hoped.

The second asset on the block was the Swiss bank DBTC, primarily a private bank. Two months ago the bank announced it was in talks to merge with another private bank, owned by the Jewish de Piciotto family. The price tag wasn't announced but sources close to the deal estimated a valuation of $800 million. Since the de Piciotto bank, UBP is the larger of the two, it seems likely that DBTC will be swallowed up and that Oudi Recanati, who resides in Geneva, will retain a board slot.

The third major asset, the U.S.-based shipping company, was apparently also put up for sale, at least according to news reports. At first it appeared that only Leon Recanati was interested in selling his stake in order to finance his IDB acquisition, but today the trend is clear ¿ Oudi Recanati is breaking up the package, he has not even the slightest interest in keeping the Recanati name in the business world ¿ and each family member is setting off on his own road.

The finance pages always explain that the U.S. capital market is more advanced because there are not a few families that control all the big concerns while the Israeli economy is still owned by a few tycoons. Families like Recanti, Ofer, Dankner, and a few successful first generation businessmen like Eliezer Fishman, Lev Leviev, the Nimrodis and the Shrem-Fudim-Kellner group account for huge portions of the local business sector.

The liquidation of family holdings by second and third generations should have accelerated the process in Israel, but here it looks like buyers are few and everything happens slower. When one family breaks up and holds a garage sale, another family is quick to step into the void. So it was with the Eisenberg family, when, upon the death of dynasty founder Shoul, the heirs sold the primary asset, the Israel Corporation to the Ofer family. And so it will apparently be as third generation Recanatis sell IDB to second generation Dankners.

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