Experts in Corporate disagree over the decision. Prof. Uriel Procaccia, an expert in Corporate Inte

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The judge's decision Dania Keret Meyer that the premium'll be hooked from the sale of Makhteshim deprives the public shareholders, disturbing the commercial law viewers the effect of the decision on these huge transactions sae in the economy. Experts disagree as to the ruling
To melting, leaving some 20 days to appeal the judge's unprecedented decision, the economic division at the Tel Aviv District Court, sae Dania Keret Meyer, about Makhteshim Agan transaction-Cimtz'iina. Meanwhile, the decision continues to rock the boat among experts in the field of companies, and many lawyers emphasize the confusion among major clients.
The judge's decision was given as part of an application for approval of a class action filed last January following the publication of the transaction. CPA Dov Kahane, holds 450 thousand shares in Makhteshim, claimed by attorney Yitzhak Aviram that the distribution of the proceeds sae among the shareholders who hold deprives the public (see box). This is a remarkable deal has not yet been discussed in Israeli courts. Uniqueness is set which will become a private, chartered remains a shareholder (minority - 40%), so there were serious questions how to relate to the transaction.
Surprisingly judge accepted the plaintiff's claims representative and decided that the reactor can not accept "excessive compensation" for the transaction. The decision concerned with other issues such as how and when to intervene in court proceedings that are made under the law. According reactor because it would lead to the decision to the general meeting of shareholders can bring against the deal.
In the decision, Judge recommended that aside similar proceedings committee shall be established an independent Board of Directors, being authorized to effectively decide against making the deal, and stay away representatives of the controlling shareholders. Regarding the intervention of the court, the judge wrote that "The conclusion I have reached is that the court to review at any time violated equality between the shareholders of a merger transaction".
Experts in Corporate disagree over the decision. Prof. Uriel Procaccia, an expert in Corporate Interdisciplinary Center, fully supports the principled position of the reactor. "Obviously before the transaction Koor dominated craters, and it is clear that after the transaction will not control," said Procaccia Calcalist ". "That is, it is falling apart under its control. Ostensibly comes a premium for control."
Professor Procaccia added that "the issue is not discussed until now in the courts because it is very rare that the transfer of control is made in shares of another. If it was a controlling shareholder sells, so I did not have some of the premium with the public, and it is written in the Companies Law. The situation here is different, Control Block unknown but the public recognized the purchaser and shareholder control adds something. This is unique in this case. " sae But this factor should not affect the decision to divide opinion of a control premium Procaccia.
Because preliminary legal decision, Judge relied in its decision on quite a few articles of academics on the subject. One of them is Prof. Assaf Hamdani, corporate law expert at the Hebrew sae University's Faculty of Law. The idea of setting up a separate board committee such transaction judge who wrote the article drew a greedy with Sharon Hannes entitled "sale under duress".
Professor Hamdani referred to a conversation with "Calcalist" potential consequences Keret's decision-Mayer. "There is a decision implications for the practice of transactions sae of interest. The decision recognizes the applicability of complete sae fairness test (test by which a transaction in which the controlling shareholder is a conflict of interest should be a fair price and fair process for approval of the deal - MS). This means granting significant tools of independent directors to negotiate effectively on the terms of the transaction, including the possibility of employing consultants and independent appraisers, would eventually result in higher quality sae protect the interests of investors. At this stage it is clear that planners deals examine the need for a change in practice ".
Hamdani explains sae that "the prevailing tendency is to focus on the implications of the decision to have control. However, the ruling an important contribution also to clarify expectations for directors sae and officers mergers. The court makes clear that the directors, approval is required to merge the forced sale to shareholders, to take action to ensure that will be submitted to the shareholders the best possible offer, "said Hamdani.
Those involved in the case from the reactor preferred not to comment, sae but conversations with their associates indicate that the strong feelings error was the court's decision. sae They argue that reactor would prefer to leave the picture completely sae and remain a minority shareholder, sae but the Chinese request of the negotiations. Book a source of loan will receive economic uncertainty was the share of the future, and is in fact wanted to make sure it gets at least the value of the shares at their fair deal.
Another opinion holds Prof. Dan Galai, head of the School of Business Administration at the Hebrew University, who was the representative plaintiff's expert portfolio. "If we estimate the value of the option only for four years, then present value of the option by the reactor is at least 244 million at acceptable economic models. sae If we take into account the actual standard deviation is higher. So it is worth tens of millions of dollars more and could reach $ 270 million dollars or more, "writes detector opinion.
The fundamental question sae of who comes detector control premium refers to the legal and economic aspects. "The economic sae logic does not justify maintaining the reactor control premium exclusively and certainly not the scale on which it is" (ie more than 10% of the transaction value without the option), explains Professor detector. "The economic perspective, it is unclear where the reactor contributes to the company's future development, and therefore sae it is not clear what the premium only given reactor".
Prof. Yitzhak Suari, the case on behalf of the reactor expert, explains the opinion submitted by the name of the company that the premium is 6% - 7% of the value of the Company sae and is within the reasonable control premium in Israel sae (which is 5% - 12%). Professor detector claims that high option value of tens of millions of dollars sae valuation of Suari, and far from the percentage sae to which it relates. "From a purely financial lease I see S.