Further progress towards a deal: Dan Real Estate shareholders to receive one-third of Donitz shares
Donitz has signed a non-binding memorandum of understanding to merge with Dan Real Estate. Upon completion, Dan's shareholders will hold approximately 33% of the combined company's shares.
Donitz reported to the stock exchange this morning that it has signed a non-binding memorandum of understanding with Dan Real Estate for a merger, following negotiations between the parties previously revealed by Calcalist. For the first time, the structure of the deal and the share exchange ratio have been disclosed: if completed, Donitz will acquire 100% of Dan Real Estate's shares through a reverse triangular merger, and Dan's shareholders will receive Donitz shares in return.
According to the memorandum, Dan's shareholders will receive a total of approximately 33% of Donitz's shares after the deal is finalized. Value Base, which currently holds approximately 48.4% of Dan's shares, will receive about 16% of Donitz's shares. The remaining shareholders of Dan, numbering about 1,200, will receive an additional 17% in total. In other words, Dan's shareholders will collectively own about a third of Donitz's shares after the merger.
In addition to the shares, Dan's owners will receive an option to purchase further Donitz shares. These options will vest if, within two years of the merger's completion, a town planning scheme (TABA) comes into effect regarding Dan's land in Shikun Dan, Tel Aviv. Dan's owners will also be entitled to additional cash consideration ranging from 30 to 50 million shekels, derived from receipts collected within 48 months of the deal's completion, based on events defined in the memorandum.
The merger is expected to significantly expand Donitz's operations and introduce it into the income-producing real estate sector. Dan will also gain significant representation on the Donitz board of directors. One of the conditions set in the memorandum is that the Donitz general meeting must approve the appointments and terms of office for four directors recommended by Dan. Upon completion, the Donitz board is expected to consist of nine directors in total. The parties have extended their exclusivity period until the earlier of 60 days from the signing of the memorandum or the date of signing a detailed agreement.
