Keystone tables rival NIS 4.35 billion bid for Shikun & Binui Energy

Keystone Fund has submitted a competing offer to buy Shikun Energy, the energy arm of Shikun & Binui. The proposal, delivered to chairman Amit Berman, uses a structure similar to Generation Capital’s deal, which was signed as a reverse triangular merger. Berman also serves as CEO of Shikun & Binui, and the company is still barred from negotiating with other parties until Generation’s 30-day due diligence period ends this week.

Keystone is offering NIS 4.35 billion in cash, payable immediately when the deal closes. That is higher than Generation’s initial headline price of NIS 4.05 billion in cash, although Generation also included up to NIS 450 million in future payments. Keystone said it is prepared to sign a binding agreement within 14 days, without making the deal contingent on due diligence, financing raises, or bringing in partners.

As part of the offer, Keystone is willing to deposit NIS 50 million into Shikun Energy’s accounts on the signing date, money it would not get back if the agreement falls apart because of a failure to win regulatory approval. The fund said it currently has NIS 450 million in cash and hinted that it may raise substantial debt or add institutional partners, though it is not making those steps a condition for the transaction.

In its presentation, Keystone argued that regulatory approval should be likely because it already holds two major power stations, Hagit and Neot Hovav, together with Shikun & Binui Energy. It said the deal would not materially increase its share of the electricity market.