Arkia Takeover Battle Intensifies as Employee Investors Join Nakash Group
Translated & summarized from Globes by baba
An intensified battle for control of Arkia airline has emerged after a deal was signed for a controlling stake by investors including Kidyan Dahari and Yaron Adib. Employee representatives are seeking alternative investors, with some initially identified by employees now joining the Nakash group's bid. The employees have a limited window to find a new investor to preserve their 22% stake in the airline, which is set to receive a $45 million capital injection.
The story in 5 lines · by baba
- Arkia's future is contested as employees seek alternative investors against a deal with Kidyan Dahari and Yaron Adib.
- Some investors initially found by Arkia employees have joined the Nakash brothers' purchasing group.
- The employees' corporation, Tot, has three business days to find a replacement investor.
- The deal includes a $45 million capital injection to stabilize Arkia's operations.
- Employees currently hold a 22% stake in Arkia through their corporation.
The struggle for the future of Israeli airline Arkia has escalated, with a group of investors led by Kidyan Dahari, Yaron Adib, and Yariv Lerner having signed a deal to acquire a controlling stake. However, the employees' corporation, "Tot" (Tot), is actively seeking alternative investors to counter this agreement.
It has now emerged that some investors initially identified by the employees have joined the Nakash brothers' purchasing group, a move that has angered employee representatives. The Tot corporation claims that one of the investor groups it had assembled, which included Yariv Lerner, Avi Elkiam, and George Waror, had advanced negotiations with the Nakash group and even scheduled a signing. However, according to Tot's board, Lerner later joined a different investor group affiliated with Nakash.
Tot's board also alleges that Avi Hurumro, representing the Nakash group, attempted to push through the approval of the new investors at a board meeting, aiming to end the employee corporations' holdings in Arkia. Under the agreement between the employee corporations and the Nakash group, employees were given three business days to find an alternative investor to match the purchase offer under identical terms. With only two days remaining, Tot is reportedly in contact with several potential investors hoping to finalize a deal that preserves employee ownership and their status as shareholders.
This development means the deal signed by the Nakash brothers with the purchasing group is not necessarily final. The employees are not just seeking to match the offer themselves but are trying to bring in other investors to present an alternative plan and maintain their stake in the company. The overall deal involves a capital injection of $45 million for Arkia to address liquidity issues and stabilize operations. The Nakash brothers are set to retain a 3% stake, while the employees currently hold 22% through Tot. This situation follows a period of tension between employees and the controlling shareholders, including protests against a previous capital injection that threatened to dilute employee holdings, and a labor dispute declared by the Histadrut over efficiency measures implemented without employee consultation.
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