Dan Bus Co. Share Sale Faces Low Employee Turnout Ahead of Deadline
Dan employee-shareholders show low initial turnout ahead of the deadline to sell their stakes to a buying group valuing the transportation giant at 2.8 billion shekels.
A consortium led by Dan CEO Ofir Karni signed an agreement to acquire a 50% stake in Dan Public Transportation for 1.4 billion shekels, valuing the entire company at 2.8 billion shekels. In the second phase, the same group—including Clal, Bank Leumi, and Mizrahi Tefahot—will purchase an additional 25% stake, reaching the 75% regulatory ceiling set by the Competition Authority. Under the deal terms, 1,100 Dan employee-shareholders must decide whether to sell their shares by Thursday, October 8.
Globes has learned that initial turnout among shareholders is low, with estimates suggesting that fewer than half of the employees will opt to sell. However, the deadline has not yet arrived, and company officials are considering extending the window by several days at the request of the workers.
Tax Implications and Employee Dilemmas
Dan members can choose between a full sale of shares yielding 1.2 million shekels per member, a partial sale yielding 600,000 shekels, or retaining their shares. These figures are pre-tax, with taxes expected to range between 25% and 50%. Veteran employees face a complex dilemma regarding generational transfer and inheritance tax liabilities.
"The tax ruling applies to any future share sale," according to an official letter sent to Dan members. "This means that while a retired member earning no other income would pay only about 25% tax on a sale now, their children who inherit the shares would face significantly higher tax rates upon any future sale."
Alongside tax considerations, shareholders weigh Dan's growth potential against immediate liquidity. While cashing out offers a guaranteed payout, many believe the company's value will continue to rise. Conversely, risk-averse members prefer to secure their funds immediately.
Company Background and Financials
Founded in 1945, Dan is Israel's second-largest bus operator after Egged, employing over 4,000 drivers and operating approximately 2,600 buses. The company generates annual revenues of roughly 2.5 billion shekels and an EBITDA of 450 to 500 million shekels, though it also carries a heavy debt burden.
Earlier this year, Value-LBH sold its 50% stake in the transportation arm while retaining its interest in Dan's lucrative real estate division, which holds significant commercial and residential assets as well as a stake in the Sorek desalination plant. The real estate arm is currently in merger talks with publicly traded developer Donitz.
