Sources at the Israel Securities Authority said today that it would take severe action against entities that try to reach unlawful deals in the Oil Refineries Haifa IPO. The Securities Authority has been monitoring the conduct of investment institutions since the completion of the institutional tender on Monday. “The Securities Authority wants to avoid a situation where entities do deals without reporting them, with the aim of avoiding exposure,” said the sources.
The institutional stage of the IPO was held on Monday, in which 44% of the company was sold to 11 Israeli and foreign investment institutions. The rest of the shares will be sold in a public tender, in which strategic investors such as Africa-Israel Investments Ltd. (TASE:AFIL; Pink Sheets:AFIVY), Israel Corp. (TASE: ILCO), and Israel Petrochemical Enterprises Ltd. (TASE:PTCH), together with Glencore International AG and Mivtach Shamir Holdings Ltd. (TASE:MISH), are expected to bid.
The Securities Authority sources said that there would certainly be a battle for the control of Oil Refineries Haifa. Its concern is to prevent backroom deals between strategic investors and investment institutions, in which the strategic party will buy the institutional investor’s stake and pay a commission as well. Such a transaction would give the strategic party immediate control over the other party’s shares, thereby enabling him to unfairly take over the company. Without such an agreement, the strategic investor would have to buy his shares on the open market at a much higher price.
The sources made it clear that the Securities Authority wanted to make sure that the public did not suffer any harm as the result of unlawful deals, and that it would, instead, gain from the development of a legitimate contest for the controlling interest in the refinery without any backroom deals.
The sources stressed that there was no risk of the IPO being halted, even if certain parties are found to have conducted secret deals. However, should such instances come to light, the Securities Authority would take action against those concerned, and a criminal inquiry might also be launched.
Published by Globes [online], Israel business news - www.globes.co.il - on February 15, 2007
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