Dan Bus Company Members Hesitant to Sell Shares Amidst Acquisition Deal

A group of buyers, led by Dan CEO Ofir Karani, is in the process of acquiring up to 75% of the Dan bus company. In February, the group purchased approximately 50% for 1.4 billion shekels, valuing the company at 2.8 billion shekels. The next phase involves the buyers acquiring an additional 25% at the same valuation, bringing their total stake to the 75% limit set by the Competition Authority. Dan members have until October 8th to decide whether to sell their shares, with options for a full sale (1.2 million shekels per member before tax) or a partial sale (600,000 shekels before tax). However, initial reports indicate a low response rate, with estimates suggesting less than half of the employees will sell. The deadline may be extended at the employees' request. A significant factor influencing the decision is the tax implications, which could range from 25% to 50%. While retirees might face a 25% tax, their heirs could be subject to higher rates if they inherit and later sell the shares. Some members view the low response as a vote of confidence in the investors and management, while others prioritize the immediate cash payout over potential future stock appreciation, citing concerns about inheritance taxes for their children. Dan Transportation, founded in 1945, is Israel's second-largest bus company after Egged, employing over 4,000 drivers and operating around 2,600 buses. The company generates approximately 2.5 billion shekels in annual revenue and 450-500 million shekels in annual operating profit, though it carries significant debt. The previous owners, Value-LBH, retained a 50% stake in Dan's real estate arm, which holds substantial assets and is in merger talks with the publicly traded real estate company Donitz.