Ellern Investments (TASE: ELIN ) is poised to wrap up talks bringing in three or four new investors.
The group is buying a 30% stake in the company for $30 million, say sources near the talks.
They say the deal will be finalized after the Bank of Israel approves the so-called Ellern deal, under which the Dankners are restructuring all their holdings in the family companies under Ellern.
The central bank's final okay is expected within days. The Bank of Israel has advised Ellern that a draft permit is ready, but its delivery has been delayed for technical reasons.
Ellern Investments is expected to shortly announce the new investors, which are not institutional investors but businessmen.
After the "Ellern deal", Ellern Investments will have indirect holdings in Bank Hapoalim (TASE: POLI ). Therefore, any investor wanting to buy more than 10% of Ellern Investments' shares will first require Bank of Israel approval. In the format of the deal taking shape, each of the three or four investors would hold less, hence the central bank need not become involved in this latest move.
Under the "Ellern deal", the Dankners will be paying Ellern Investments $26 million, increasing their stake in the company from 58% today to 85%. But after the new investors enter, the family's interest will drop to 55%.
The controlling shareholders in Ellern Investments will be the Dori family, Danny and Gadi Dankner, and the Mor family..
The Eller deal consists of the group taking over the controlling interest in Dankner family companies Dor Chemicals (TASE: DORC ) and Dankner Investment (TASE: DKNR ). Subsidiary Ellern Holdings (TASE: ELHD ) will hold the controlling interest in Israel Salt Industries (TASE: SALT ), which has shares in Bank Hapoalim. In all, some $230 million will be changing hands in the Ellern deal.
Completion of the Ellern deal will finally disengage scion Nochi Dankner from the controlling interest in Bank Hapoalim, as he agreed to do in order to obtain central bank approval to take over IDB Holding Corporation (TASE: IDBH). The central bank had stipulated his dissociation from decision-making at Bank Hapoalim because of IDB's heavy debts to the bank. Nochi Dankner will retain a 1.98% interest in Bank Hapoalim, but of ordinary shares, not controlling shares.
This week Ellern Investments is supposed to finalize another deal, in which Dor Gas is buying a 20% stake in Ellern Infrastructures for $6 million. Dor Gas is owned by Ellern Investments.