Richard Branson in collaboration talks with El Al

Eliav Alaluf and Hadas Magen
10/08/2009   18:56

Sources inform ”Globes” that Virgin Group Ltd. owner Sir Richard Branson is in preliminary talks with El Al Israel Airlines Ltd. (TASE: ELAL) shareholders, headed by Tami and Oded Borovich, about collaboration between the companies. One Virgin Group company is Virgin Atlantic Airlines. On Branson’s behalf, the talks are being led by Guy Rosenhause, a nephew of Shufersal CEO Effie Rosenhause, who is close to Nochi Dankner, who controls Shufersal Ltd. (TASE:SAE;Pink Sheets: SSLTF) through IDB Holding Corp. Ltd. (TASE:IDBH). Adv. Ram Caspi is also involved in the talks.

Although the talks are only preliminary, the sources said that a number of options for collaboration were under consideration, and that an acquisition of or investment in El Al had not been ruled out.

The sources added that the parties were also considering Virgin becoming a partner in El Al charter subsidiary Sun D’Or International Airlines Ltd., which would be rebranded with the Virgin brand. This would be complicated to carry out because of issues relating to the ownership of Sun D’Or’s planes. One possibility is that Virgin would become a partner in Knafaim Holdings Ltd. (TASE: KNFM), which the Boroviches control, through its plane leasing unit. Another possibility is that Virgin would buy Tami Borovich’s shares in El Al.

Sources close to the talks said that Branson is excited and full of praise about the El Al brand, under CEO Haim Romano. The sources cautioned, however, that it is premature to know how the talks will develop.

Despite the closeness of the Rosenhauses to Nochi Dankner, neither Branson or anyone on his behalf have made an attempt to invest in or acquire Israir Airlines and Tourism Ltd., even though Dankner has been seeking a solution for his holding in Israir parent company Ganden Tourism Ltd. and would like to see just such a deal.

It is not clear what would be the effect of a Virgin collaboration with El Al or Knafaim on the relationship between the Rosenhauses and Dankner.

El Al said in response, “The company conducts negotiations with various companies around the world on a variety of issues. The company does not comment on these matters.”

El Al’s share fell 2.2% to NIS 0.97 today.

Published by Globes [online], Israel business news – www.globes-online.com – on August 10, 2009

© Copyright of Globes Publisher Itonut (1983) Ltd. 2009

http://www.globes.co.il/serveen/globes/docview.asp?did=1000488717&fid=1688

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