Company Gas oak Which owns 4% of the Tamar gas reservoir, reports that it will not promote the merger recently offered to it by a company. Tamar Petroleum , Which also holds the same database. Alon Gaz reports that its controlling shareholder (80%), Alon Delek, announced that it has decided to intensively promote at this stage only procedures for the sale of its holdings in the company, with the aim of realizing these holdings in the short term based on inquiries from several parties.
It seems that the institutional entities holding Alon Delek (which received their shares as part of a debt settlement) prefer to receive for their shares a high cash consideration over a mix of shares and cash in a merger transaction. This is after the Alon Gas share has doubled in value in the past year, and reflects a value of NIS 350 million for the company, which gives Alon Delek’s holdings a current value of NIS 280 million.
At the same time, Alon Gaz updates that this week a company received a legally binding offer and is subject to completing a due diligence and signing a detailed agreement, to enter into negotiations for a merger with the private company Zabar Solar, which deals in the field of solar energy.
As stated, in view of the controlling shareholder’s announcement and the low probability at this stage to promote the merger transaction that requires Alon Delek’s support, Alon Gaz’s Board of Directors decided not to advance negotiations at this stage for the company’s merger proposals or 100% acquisition of its shares.
“Due diligence is expected to be simple”
About two weeks ago, Alon Gaz reported a merger proposal from the side Tamar PetroleumWhich holds 16.75% of the Tamar reservoir, in which it will acquire the full share capital of Alon Gaz in exchange for cash and shares of the company.
Tamar Petroleum is traded at a value of NIS 816 million, while Alon Gaz is traded at a value of NIS 350 million. The main shareholder in Tamar Petroleum is the businessman Help meWhich holds 23.4% of the company’s shares worth close to NIS 200 million.
The control of Alon Gaz (approximately 80%) is held by Alon Fuel Company (Alon Group), which was previously in a debt arrangement and has since been controlled by a group of institutional entities, which hold bonds worth approximately NIS 575 million.
Tamar Petroleum believed that the merger proposal, the second in number submitted to Alon Gas, would be more attractive to shareholders in the acquired company due to a substantial cash component, which would allow Alon Gas shareholders flexibility in choosing whether to maintain or exercise exposure to the Tamar reservoir.
“The almost complete identity in the companies’ operations will allow the synergistic benefits arising from owning the same property to be utilized, including savings in management and general expenses.