Shikun & Binui Rejects Keystone Offer, Citing Exclusivity with Generation

Shikun & Binui told Keystone that, because it is bound by an exclusivity commitment in talks to sell Shikun & Binui Energy to Generation Fund, it cannot advance Keystone’s acquisition proposal, will not examine it, and will not respond to its contents.

In a stock exchange filing, Shikun & Binui Energy also said there is no certainty it will sign an agreement with Generation, and even if it does, there is no certainty the transaction will be completed. The company added that even if no deal is signed with Generation, there is still no guarantee it will enter negotiations with Keystone.

Keystone submitted a bid structured similarly to Generation’s, which has already signed a memorandum of understanding to acquire the company through a reverse triangular merger. Calcalist first reported Keystone’s intention to submit a competing offer. Keystone is offering 4.35 billion shekels in cash, payable immediately when the deal closes, slightly above Generation’s immediate cash component of 4.2 billion shekels, of which 150 million shekels would be paid at closing.

Generation’s proposal also includes up to 300 million shekels in future consideration, which could lift the total deal value to 4.5 billion shekels. People familiar with the negotiations say Generation is in advanced talks toward a binding agreement and both sides want to complete the deal. Generation is believed to have more than 1.5 billion shekels in cash after a recent capital raise backed by major Israeli institutional investors. Keystone reported about 450 million shekels in cash and would need additional debt financing, while already carrying roughly 1 billion shekels in debt. Keystone said its chances of obtaining regulatory approval are higher, but Generation’s camp believes a solution can be found to secure the required approvals.