Arkia Employees Seek Alternative Investors Amidst Takeover Bid
Translated & summarized from Calcalist by baba
Arkia employees, holding 22% of the airline's shares, have three days to find alternative investors or improve a takeover bid by a group led by Yariv Lerner. The employees aim to prevent dilution of their stake in the company, which needs a $45 million capital injection. The current owners, the Nakash brothers, will see their stake reduced to 3% as part of the deal.
The story in 5 lines · by baba
- Arkia employees have three days to find alternative investors for the airline.
- Employees collectively own 22% of Arkia shares and seek to avoid dilution.
- A takeover bid by a group led by Yariv Lerner is currently under review.
- The deal requires a $45 million capital injection to address liquidity issues.
- Current owners, the Nakash brothers, will retain only 3% ownership.
Employees of the Israeli airline Arkia, who collectively own approximately 22% of the company's shares through the "TUT" corporation, are actively seeking alternative investors. They have been granted a three-day window to present a competing offer or improve the terms of the current acquisition deal. This move aims to secure a better deal that will not dilute their existing shareholdings.
The employees are urgently searching for investors who can inject the necessary capital into Arkia while preserving their ownership stake. An additional option being considered is for the employees themselves to contribute funds proportionally to their shares, though this is their least preferred choice. The current situation follows months of tension between the employees and the company's management and current owners, the Nakash brothers.
Previously, employees opposed a capital injection plan that threatened to dilute their shares, even declaring a labor dispute due to uncertainty surrounding the company's future. The proposed deal involves injecting about $45 million to strengthen the company's capital, address liquidity issues, and ensure continued operations.
The Nakash group, which currently controls the airline, stated that the Arkia deal involves the issuance of new shares. The new buyers will inject approximately $30 million, with the Nakash group contributing an additional $8.5 million. This will dilute existing shareholders' stakes, leaving the Nakash group with about 3% ownership. The buyer group expressed confidence in Arkia's potential and employees, intending to retain the airline's workforce.
