Nobody underestimates Nochi Dankner’s efforts in bringing an investor into IDB Holding Corp. Ltd. (TASE:IDBH), in which he is the controlling shareholder, or his connections in the business. Even so, the Ganden Holdings Ltd. – Eduardo Elsztain deal seems so strange that it is difficult to believe that it will actually happen.

IDB reported yesterday that the Argentinean businessman will inject $25-$100 million for 10-30% of Ganden’s shares. The deal gives Ganden a value of NIS 1 billion, when its only asset is a controlling stake in IDB, which has a market cap of NIS 300 million as well as a debt of NIS 600 million to the banks. In other words, Ganden’s value is negative.

It is reasonable to assume that Elsztain is quite capable of making these simple calculations and can see these numbers for himself. Thus it is hard to understand why he is conducting these talks for a deal that is clearly not worth his while. Elsztain is an Orthodox Jew but it is not reasonable to assume that he is putting his hand in his pocket for religious motives.

So why is he considering the deal? Maybe Elsztain believes that IDB’s subsidiaries are an interesting investment opportunity and the right way to reach them is through the parent company. O that if Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL) and Shufersal (NYSE:SSLTF.PK; TASE: SAE) recover and Credit Suisse continues to rise and Makhteshim Agan Industries Ltd. again goes public after undergoing substantial approvement following the ChemChina acquisition, then investment in the parent company will generate some value for Elsztain…Read More>>

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