Dan Bus Cooperative Extends Share Sale Deadline Amid Low Employee Turnout
The deadline for 1,100 Dan public transport members to sell their shares in a 2.8 billion shekel valuation deal has been extended amid low initial turnout and complex tax considerations.
Following requests from Dan public transport employees, the deadline for 1,100 cooperative members to decide on selling their shares has been extended by at least a week. Earlier in the week, sources indicated that response rates remain low, with fewer than half of the employees expected to sell.
The Billion-Shekel Acquisition Deal
Last February, an investor group led by Dan CEO Ofir Karni signed an agreement to acquire approximately 50% of Dan Transportation for 1.4 billion shekels, valuing the entire company at 2.8 billion shekels. In a second phase, the same investor group—which includes Clal and investment arms of Bank Leumi and Bank Mizrahi Tefahot—will acquire an additional 25% of Dan shares at the same valuation, reaching the 75% maximum cap set by the Israel Competition Authority. Initially, members were required to decide by October 8 whether and how many shares to sell.
However, some members have struggled to finalize their decision, prompting the deadline extension. Some requested additional time to consult with family members returning from abroad next week.
Critical Financial Dilemmas
This is a momentous decision for the cooperative members, potentially impacting future generations. Dan members can choose between a full sale of shares for 1.2 million shekels per member, a partial sale for 600,000 shekels, or retaining their shares. All figures are pre-tax, making taxation a central consideration, with tax rates ranging from 25% to 50%.
"The tax ruling applies to any future sale of your shares as well," stated a letter sent to Dan members. "This means that while a pensioner or retired member not earning income from other sources will pay only about 25% tax on an immediate sale, their children who inherit the shares will face significantly higher tax rates upon any future sale."
Alongside tax considerations, members must weigh Dan's growth potential. While selling offers immediate cash, holding onto shares could yield higher long-term value. Conversely, some employees are unwilling to take the risk, with one selling member telling Globes: "With all due respect to the company's strategic plans, I am not gambling on my children's inheritance."
Founded in 1945, Dan Transportation is Israel's second-largest bus operator after Egged, employing over 4,000 drivers and operating approximately 2,600 buses.
