Dan Bus Company Members Face Crucial Decision on Share Sale

A critical stage in the sale of the Dan transportation giant has been reached, with 1,078 long-standing members facing a significant financial decision. By October 8, these members must decide whether to sell their shares in the second phase of the deal. In this phase, a purchasing group will acquire an additional 25% of the company for 650 million shekels. This move, led by CEO Ofir Karni and institutional investors including Bank Leumi, Mizrahi-Tefahot, and Clal Insurance, values the company at approximately 2.8 billion shekels. For Dan members, who already saw the purchasing group acquire 50% of the company in June, this offers a chance to liquidate their non-tradable shares. Members selling half their holdings stand to gain about 600,000 shekels, while a full sale could yield up to 1.2 million shekels.

However, the decision is complex, involving considerations beyond immediate financial gain. Tax liabilities are a major factor, with the Israel Tax Authority stipulating that the tax rate will be the higher of capital gains tax (25%) or the individual's marginal tax rate (up to 50%). While this might be the minimum rate for retirees with no other income, their heirs might face the maximum rate on future sales. The current deal also offers a tax deferral over four years, a benefit that may not be available later.

Despite the potential profits, a significant portion of the members are reportedly hesitant to sell. This hesitation stems from a desire to remain partners in Dan's future growth, particularly in areas like infrastructure, electrification, and international transportation. The possibility of a future stock exchange listing also presents a dilemma between immediate cash and long-term return potential.