Report Date: 30 of August, 2020 Bank Mizrahi-Tefahot Ltd
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Mizrahi Tefahot Bank Ltd.’s Immediate Reports are published in Hebrew on the Israel Securities Authority and the Tel Aviv Stock Exchange websites. The English version is prepared for convenience purposes only. The only binding version of the Immediate Reports is the Hebrew version. In the event of any discrepancy or inconsistency between the Hebrew version and the translation to English, the Hebrew version shall prevail and supersede, for all purposes and in all respects. Report date: 30 of August, 2020 Bank Mizrahi-Tefahot Ltd. (the “Offeror” or the “Bank”) Shelf Offering Report Constituting as well a Full Tender Offer Specification by means of an Exchange Tender Offer The validity whereof is contingent upon the purchase of all offered shares For the purchase of 73,583,024 Ordinary Shares par value NIS 0.01 each (Constituting 100% of the issued and paid-up share capital and voting rights) of The Union Bank of Israel Ltd. (“Union”) 1_2956602 - 2 - INDEX 1. Preamble 2. The Offered Securities 3. Manner of Offering the Securities 4. Details regarding the Shares Offered for Purchase 5. Details regarding the Offered Consideration 6. Preconditions for the Bank’s Undertaking in the Exchange Tender Offer 7. Decision of the Director General of the Israel Competition Authority 8. Details about the Bank 9. Details regarding the acceptance and consideration for the offered shares 10. Rescinding the Bank’s Exchange Tender Offer 11. Deferral of the Last Acceptance Date and Amending the Exchange Tender Offer 12. Notices on behalf of Union shareholders regarding their intention to accept the Exchange Tender Offer 13. The provisions of sections 337 and 338 to the Companies Law 14. Making Union a Private Company and Delisting from trade on the Tel Aviv Stock Exchange 15. Report regarding the Results of the Exchange Tender Offer 16. Taxation 17. Powers of the Israel Securities Authority 18. Permits and Approvals 19. Fee Payment 20. Consideration and Related Expenses 21. Updates to the Shelf Prospectus 22. Letter of Consent from the Bank’s Auditors 23. Actuary’s Letter of Consent 24. Details regarding the Bank’s Representative vis-à-vis Handling of the Specification 25. Legal Opinion 26. Signatures Annexes Annex A – Acceptance notice of an unregistered holder. Annex B – Acceptance notice of a Tel Aviv Stock Exchange Member. Annex C – Acceptance notice of a registered holder. Annex D – Share transfer deed. Annex E – Letter of Consent from the Auditors. Annex F – Actuary’s Letter of Consent. 2956602_1 - 3 - 1. Preamble 1.1. As specified in previous immediate reports published by the Bank,1 the Bank entered into an agreement (and addendums to the agreement) with the shareholders of Union (the “Agreement”), who jointly hold Union shares constituting about 47.63% of Union’s issued and paid-up capital (the “Controlling shareholders” and the “Shares of the Controlling shareholder”, respectively). According to the Agreement, subject to the fulfillment of preconditions set forth in the Agreement for filing and publishing a tender offer, the Bank undertook to publish a full exchange tender offer for the purchase of Union’s shares, and on the other hand, the Controlling shareholders undertook to accept the aforementioned exchange tender offer, to be executed subject to the fulfillment of the preconditions set forth in the Agreement. The Bank received the notices from an additional Union shareholder, who holds (through trustees) Union shares constituting about 27.12% of Union’s issued and paid-up share capital (the “Additional shareholder”), whereby, inter alia, the Additional shareholder will accept the exchange tender offer to purchase Union shares as aforementioned. For additional details regarding the Agreement and the notices from the Additional shareholder, see section 8.4 below. 1.2. In light of the fulfillment of the preconditions set forth in the Agreement for filing and publishing the tender offer, and in accordance with the resolution of the board of directors of the Bank as of August 27, 2020,2 the Bank hereby submits a Full Exchange Tender Offer, subject to Section 336 to the Companies Law, 5759 – 1999 (the “Companies Law”), contingent upon the 1 Including immediate reports dated November 28, 2017 (ref. no.: 2017-01-110619) and from January 16, 2018, February 7 2018, May 30, 2018, and August 5, 2018 (ref. no.: 2018-01-005313, 2018-01-053347, 2018-01-060643, and 2018-01-072859, respectively) and the immediate report dated July 8, 2019 (ref. no.: 2019-01-070000), mentioned in the Board of Directors report attached to the third quarterly report for 2019, under the section “Significant Developments in Business Operations Management”, as published on November 18, 2019 (ref. no.: 2019-01-098931) and immediate reports from November 25th and 28th 2019 (ref. no.: 2019-01-101826 and 2019-01-103980, respectively), and from January 1st, 8th, and 27th, 2020 (ref. no.: 2020-01-000351, 2020-01-003750, and 2020-01-010362, respectively), mentioned in the periodic report for 2019 under the chapter “Business Objectives and Strategy”, as published on February 25, 2020 (ref. no.: 2020-01-018930), and the content of the first quarterly report for 2020, under the chapter “Significant Developments in Business Operations Management”, as published on May 31, 2020 (ref. no.: 2020-01-055398), mentioned in the immediate report (amendment) from June 1, 2020 (ref. no.: 2020-01-055797), as well as the immediate reports from July 14th and 27th, 2020 (ref. no.: 2020-01-067528 and 2020-01-079680, respectively) (the “Previous Reports”). The content of the Previous Reports is included in this Report by way of reference. 2 It shall be noted that for the sake of caution, the report on the resolution of the board of directors of the Bank was deferred pursuant to Regulation 36(b) of the Securities (Periodic and Immediate Reports) Regulations, 5730 – 1970, until the preconditions set forth in the Agreement have been fulfilled, due to the concern that such report might compromise the fulfillment of any of the suspending conditions and thwart the Tender Offer. 2956602_1 - 4 - fulfillment of the terms specified in section 6 below, and is addressed to all Union shareholders, for the purchase of 73,583,024 Ordinary Shares par value NIS 0.01 each (the “Union shares”), constituting 100% of Union’s issued and paid-up share capital and voting rights in Union, against Ordinary Shares par value NIS 0.1 each of the Bank, issued by the Bank, thus subject to the Bank’s shelf prospectus, dated December 4, 2019 (the “Shelf Prospectus” or the “Prospectus”),3 and subject to the provisions of the Securities Law, 5728 – 1968 (the “Securities Law”), the Securities Regulations (shelf prospectus of securities), 5765 – 2005 (the “Shelf Prospectus Regulations”), the Companies Law, and the Securities Regulations (tender offer), 5760 – 2000 (the “Tender Offer Regulations”), all subject to the terms of the Shelf Offering Report hereof (the “Shelf Offering Report” or the “Report”). The Shelf Offering Report hereof includes and constitutes as well a tender offer specification in accordance with the Tender Offer Regulations (the “Exchange Tender Offer” or the “Tender Offer” and the “Specification”, respectively). In addition to the Bank shares issued against Union shares, as part of the Exchange Tender Offer, the Union shareholders (not including the Additional shareholder) will be paid a cash consideration in the total sum of NIS 30 million which was deposited by the Additional shareholder in the hands of the Offer Coordinator prior to the publication of this Shelf Offering Report (the “Cash Consideration”), which constitutes an integral part of the payments to the offerees (as defined below), except for the Additional shareholder, subject to the Tender Offer. For additional information regarding the Cash consideration, including information regarding the Additional shareholder’s waiver notice vis-à-vis his share in the Cash consideration, see section 5.3 below. 1.3. The validity of the Tender Offer is contingent, inter alia, upon obtaining the minimum acceptance rate, as defined below, whereby the Offeror will purchase all of the Union shares offered for purchase, so that after the purchase the Offeror will hold Union’s full issued and paid-up share capital and voting rights, and Union will become a private company, all in accordance with and subject to the terms specified in the Exchange Tender Offer hereof. For details regarding the preconditions for the validity of the Tender Offer, see section 6 below. 1.4. In this Shelf Offering, the terms contained therein will be assigned the meaning as defined in the Shelf Prospectus, unless otherwise stated. Subject to Section 338(c) to the Companies Law, the Offeror hereby notifies that an Offeree who accepts the Tender Offer received as aforementioned in Section 337(a) or 337(a1) to the 3 As published on December 3, 2019 (ref. no.: 2019-01-106011). 2956602_1 - 5 - Companies Law, will not be entitled to an appraisal remedy subject to Section 338 to the Companies Law. 2. The Offered Securities 2.1. 19,865,165 registered Ordinary Shares, par value NIS 0.1 each of the Bank (the “Offered Shares” or the “Offered Securities”), offered by way of an Exchange Tender Offer, contingent upon the fulfillment of the terms specified in Section 6 below, including – obtaining the minimum acceptance rate, as the term is defined and in section 6.1 below, addressed to all Union shareholders who as of the date of this Report hold 73,583,024 Union shares, constituting 100% of Union’s issued and paid-up share capital and voting rights in Union (the “Offerees” and the “Offerees’ Shares”, respectively). It shall be noted that to the best knowledge of the Bank, based on the reports published by Union (which is a reporting corporation, within the definition of this term under the Securities Law), no securities which are exercisable and/or convertible to Union shares exist.