Welcome to the next round in the feud between Moti Ben-Moshe and Eduardo-Elsztain, the controlling shareholders in IDB Development Corp. (TASE: IDBD).
The IDB Group is one of Israel’s biggest business groups, holding leading corporations in key business sectors at home and abroad.
Ben-Moshe and Elsztain bought control of IDB last year, from the previous controlling shareholder Nochi Dankner, who got into a debilitating amount of debt.
So Elsztain and Ben-Moshe each put $180 million into IDB, as part of the Dankner settlement, and also promised to invest another $100 million this year.
Now Ben-Moshe has told the Tel Aviv Stock Exchange (TASE) that he demands the right to buy half the securities Elsztain bought, at the price the latter had bought it for. He also demands the right to buy the shares Elsztain transferred to two other companies under his control.
Extra said, “The rights issue and the procedures supporting it were a violation of the shareholders agreement and unacceptable conduct and in bad faith. This follows the violation of the shareholders agreement by [Elsztain’s company] Dolphin even before the rights issue.”
Elsztain, who holds more than half the shares in IDB after the rights issue, will likely enjoy a majority on the company board—with five directors—while Ben-Moshe gets stuck with one director.