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Proc-Type: 2001,MIC-CLEAR
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SECURITIES AND EXCHANGE COMMISSION SCHEDULE TO GIVEN IMAGING LTD. ELRON ELECTRONIC INDUSTRIES LTD. ORDINARY SHARES, PAR VALUE NIS 0.05 PER SHARE M52020100 Donna Gershowitz, Adv.
With copies to:
Richard H. Gilden, Esq.
Eytan Greenberg, Adv.
CALCULATION OF FILING FEE
Transaction Valuation* Amount of Filing Fee**
*
For purposes of calculating the filing fee only, this amount is based on the offer to purchase 1,462,640 ordinary shares of Given Imaging Ltd. at a purchase price of $16.54 cash per share.
**
Calculated in accordance with Section 14(g) of the Securities Exchange Act of 1934, as amended. ***
Previously paid. £
Check the box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
Amount Previously Paid: None.
Filing Party: Not Applicable.
£
Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer.
Check the appropriate boxes below to designate any transaction to which the statement relates:
S
third-party tender offer subject to Rule 14d-1
£
issuer tender offer subject to Rule 13e-4
£
going-private transaction subject to Rule 13e-3
£
amendment to Schedule 13D under Rule 13d-2 Check the following box if the filing is a final amendment reporting the results of the tender offer: £
WASHINGTON, D.C. 20549
(Rule 14d-100)
Tender Offer Statement under
Section 14(d)(1) or 13(e)(1) of the Securities Exchange Act of 1934
(Amendment No. 1)
(Name of Subject Company (Issuer))
(Name of Filing Person (Offeror))
(Title of Class of Securities)
(CUSIP Number of Class of Securities)
Elron Electronic Industries Ltd.
3 Azrieli Center, Triangular Tower, 42nd Floor, Tel Aviv 67023, Israel
Telephone: (972) 3-607-5555
(Name, address and telephone numbers of person authorized to receive
notices and communications on behalf of filing persons)
Kramer Levin Naftalis & Frankel LLP
1177 Avenue of the Americas
New York, New York 10036
Telephone: (212) 715-9100
Dr. Shachar Hadar, Adv.
Gross, Kleinhendler, Hodak, Halevy, Greenberg & Co.
One Azrieli Center (Round Building)
Tel Aviv 67021, Israel
Telephone: (972)-3-607-4444
$24,192,065
$950.75***
Form or Registration No.: Not Applicable.
Date Filed: Not Applicable.
This Amendment No. 1 amends and supplements the Tender Offer Statement on Schedule TO filed by Elron Electronics Industries Ltd., an Israeli company (Elron), on May 16, 2008 with the
Securities and Exchange Commission (the Schedule TO), in connection with its offer to purchase 1,462,640 outstanding ordinary shares, NIS 0.05 par value per share (the Shares), of Given
Imaging Ltd. (Given Imaging), at $16.54 per Share, net to the seller in cash, less any applicable withholding taxes, and without interest, upon the terms of, and subject to the conditions to, the
Offer to Purchase, dated May 16, 2008 (the Offer to Purchase) and the related Letter of Transmittal, copies of which were previously filed with the Schedule TO as Exhibits (a)(1)(A) and
(a)(1)(B), respectively (which, together with any amendments or supplements thereto, constitute the Offer). This Schedule TO is intended to satisfy the reporting requirements of Rule 14d-1 under the Securities Exchange Act of 1934, as amended. The information contained in the Schedule TO, the Offer to
Purchase and the Letter of Transmittal is incorporated herein by reference in response to all of the items of this Amendment No. 1 to the Schedule TO, except that such information is hereby
amended and supplemented to the extent specifically provided herein. Capitalized terms used herein but not otherwise defined have the meaning ascribed to such terms in the Offer to Purchase. ITEM 4 Item 4 of the Schedule TO, which incorporates by reference the information contained in the Offer to Purchase, is hereby amended and supplemented as follows: 1. Material U.S. Federal Income Tax and Israeli Income Tax Consequences Section 5 of the Offer to Purchase titled Material U.S. Federal Income Tax Considerations is hereby restated in its entirety to replace the word considerations in the phrase tax considerations
with the word consequences throughout the Section.
5. MATERIAL U.S. FEDERAL INCOME TAX AND ISRAELI INCOME TAX CONSEQUENCES. Material U.S. Federal Income Tax Consequences. U.S. Holders. The following discussion summarizes the material U.S. federal income tax consequences of the offer applicable to the shareholders of Given Imaging who are U.S. Holders and
whose Given Imaging shares are tendered and accepted for payment pursuant to the offer. A U.S. Holder means a holder of Given Imaging shares who is:
a citizen or resident of the United States; a corporation (or other entity taxable as a corporation for U.S. federal income tax purposes) created or organized under the laws of the United Sates, any state or political subdivision thereof
or the District of Columbia; an estate, the income of which is subject to U.S. federal income tax regardless of its source; or a trust (A) if a court within the United States is able to exercise primary jurisdiction over its administration and one or more U.S. Persons (as defined in the Code) have authority to control all
of its substantial decisions, or (B) if, it has a valid election in effect under applicable Treasury Regulations to be treated as a U.S. Person. This discussion is based on current provisions of the Internal Revenue Code of 1986, as amended, referred to as the Code, current and proposed Treasury Regulations promulgated under the
Code, administrative pronouncements and judicial decisions and interpretations as of the date hereof, all of which are subject to differing interpretations or change, which change may apply
retroactively and could materially affect the continued validity of this summary and the tax consequences described in this Section 5. Subject to the discussion set forth below under the heading
entitled Characterization of the Purchase if Given Imaging is a Passive Foreign Investment Company, this discussion assumes that Given Imaging is not and has never been a passive foreign
investment company, controlled foreign corporation, foreign investment company or foreign personal holding company for U.S. federal income tax purposes. This discussion addresses only Given Imaging shares that are held as capital assets within the meaning of Section 1221 of the Code (generally, for investment). No ruling has been or will be
sought from the U.S. Internal Revenue Service, or IRS, and no opinion of counsel has been or will be rendered, as to the U.S. federal income tax consequences of the offer. This discussion does not
address all of the tax consequences that may be relevant to shareholders in light of their particular circumstances or certain types of shareholders subject to special treatment, including, without
limitation:
regulated investment companies; broker-dealers (including in securities or foreign currency) or insurance companies; persons who have elected to apply a mark-to-market method of accounting; tax-exempt organizations or retirement plans; certain former citizens or former long-term residents of the United States; persons subject to the alternative minimum tax; banks and other financial institutions; persons who hold their Given Imaging shares as part of a position in a straddle or as part of a hedging, conversion, constructive sale, synthetic security, or other integrated investment; holders who received their Given Imaging shares through the exercise of employee stock options or otherwise as compensation; partnerships or other pass-through entities or persons who hold their Given Imaging shares through partnerships or other pass-through entities; holders who own directly, indirectly or by attribution at least 10.0% of the voting power of Given Imaging; and persons whose functional currency is not the U.S. dollar.
In addition, this summary does not discuss any foreign, state, or local tax consequences or any U.S. tax consequences (e.g., estate or gift tax) relevant to U.S. Holders other than U.S. federal
income tax consequences. WE RECOMMEND THAT GIVEN IMAGING SHAREHOLDERS WHO ARE U.S. HOLDERS CONSULT THEIR TAX ADVISORS AS TO THE PARTICULAR TAX
CONSEQUENCES OF THE OFFER TO THEM, INCLUDING THE EFFECTS OF APPLICABLE STATE, LOCAL, FOREIGN OR OTHER TAX LAWS AND POSSIBLE CHANGES IN
THE TAX LAWS. FOR A DISCUSSION OF CERTAIN ISRAELI INCOME TAX CONSEQUENCES THAT MAY APPLY TO U.S. HOLDERS, SEE BELOW UNDER MATERIAL ISRAELI INCOME
TAX CONSEQUENCES. Characterization of the Purchase if Given Imaging is not a Passive Foreign Investment Company. The receipt of cash for Given Imaging shares pursuant to the offer will be treated as a taxable
transaction for U.S. federal income tax purposes. In general, a U.S. Holder who sells Given Imaging shares pursuant to the offer will recognize gain or loss for U.S. federal income tax purposes equal
to the difference, if any, between the amount of cash received and the U.S. Holders adjusted tax basis in the Given Imaging shares sold pursuant to the offer. Gain or loss will be determined
separately for each block of Given Imaging shares (i.e., Given Imaging shares acquired at the same cost in a single transaction) tendered pursuant to the offer. The gain or loss will be long-term
capital gain or loss if the U.S. Holder has held the Given Imaging shares for more than one year at the time of the consummation of the offer. Long-term capital gains are currently subject to a
maximum rate of 15%. Special limitations apply to the use of capital losses. Characterization of the Purchase if Given Imaging is a Passive Foreign Investment Company. In general, a non-U.S. corporation will be classified as a passive foreign investment company within
the meaning of Section 1297(a) of the Code (PFIC) if, for any taxable year, at least 75% of its gross income consists of passive income (such as dividends, interest, rents, royalties, or gains on
certain securities or commodities transactions), or at least 50% of the average value of its assets (determined on a quarterly basis) consists of assets that produce or are held for the production of,
passive income. Given Imagings 2007 Form 20-F provides that Given Imaging, subject to the discussion therein, believes that in 2007 it was not a PFIC. The 2007 Form 20-F also provides that the
determination of PFIC status is a factual determination that must be made annually at the close of each taxable year. In general, if Given Imaging was characterized as a PFIC for 2007 or any prior taxable year or is a PFIC for 2008, any gain recognized by a U.S. Holder who sells Given Imaging shares pursuant
to the offer would be treated as ordinary income and would be subject to tax as if the gain had been realized ratably over the holding period of the Given Imaging shares. The amount allocated to
the current taxable year and any taxable year with respect to which Given Imaging was not a PFIC would be taxed as ordinary income (rather than capital gain) earned in the current taxable year.
The amount allocated to other taxable years would be taxed at the highest marginal rates applicable to ordinary income for such taxable years, and the U.S. Holder also would be liable for an
additional tax equal to the interest on such tax liability for such years. We recommend that U.S. Holders consult their tax advisors regarding the potential application of the PFIC rules to the sale of
Given Imaging shares pursuant to the offer. Information Reporting and Backup Withholding. Payments made by the U.S. Depositary in connection with the offer may be subject to information reporting to the IRS and possible backup
withholding. Under the U.S. federal backup withholding tax rules, 28% of the gross proceeds payable to a shareholder or other payee pursuant to the offer must be withheld and remitted to the U.S.
Treasury, unless the U.S. Holder (or other payee) who tenders its Given Imaging shares to the U.S. Depositary provides such shareholders (or other payees) taxpayer identification number
(employer identification number or social security number) to the U.S. Depositary and otherwise complies with the backup withholding rules. Each U.S. Holder tendering its shares to the U.S.
Depositary should complete and sign the Substitute Form W-9 included as part of the Letter of Transmittal or a Form W-8, as applicable, in order to provide the information and certificate necessary
to avoid backup withholding. Amounts withheld under the backup withholding rules are
not an additional tax and may be refunded or credited against the holders U.S. federal income tax liability, provided the required information is furnished to the IRS. Material Israeli Tax Consequences. The following discussion summarizes the material Israeli tax consequences of the offer applicable to Given Imagings shareholders whose Given Imaging shares are tendered and accepted for
payment pursuant to the offer. The following discussion is based on the Ordinance, the regulations promulgated thereunder, administrative rulings and pronouncements, all of which are subject to
change, possibly with retroactive effect. Any such change could alter the tax consequences discussed below. There can be no assurance that the Israeli Tax Authority, or the ITA, or a court will not
take a position contrary to the Israeli income tax consequences discussed herein or that any such contrary position taken by the ITA or a court would not be sustained. This discussion addresses only
Given Imaging shares that are held as capital assets (generally, assets held for investment) within the meaning of the Ordinance. This discussion does not address all of the tax consequences that may
be relevant to shareholders in light of their particular circumstances or certain types of shareholders subject to special treatment. The tax discussion set forth below is based on present law. Because individual circumstances may differ, we recommend that holders consult their tax advisors to determine the applicability of the
rules discussed below to you and the particular tax effects of the offer, including the application of Israeli or other tax laws. The summary below does not discuss the effects of any non-Israeli tax laws. We recommend that holders of Given Imaging shares who are U.S. Holders consult their tax advisors regarding the
U.S. federal, state and local income tax consequences of the offer. For a discussion of material U.S. federal income tax consequences, see above under Material U.S. Federal Income Tax
Consequences. Characterization of the Purchase. The receipt of cash for Given Imaging shares pursuant to the offer generally will be treated as a taxable transaction for Israeli income tax purposes, pursuant to
which a holder of Given Imaging shares will be treated as having sold such Given Imaging shares. General. Israeli law generally imposes a capital gains tax on a sale or disposition of any capital assets by Israeli residents, as defined for Israeli tax purposes (see Annex B), and on the sale of
assets located in Israel, including Given Imaging shares in Israeli companies (such as Given Imaging), by non-Israeli residents, unless a specific exemption is available or unless a tax treaty between
Israel and the shareholders country of residence provides otherwise. Tax Rates. Pursuant to the Ordinance and the regulations promulgated thereunder, as of January 1, 2006, the tax rate applicable to capital gains derived from the sale of Given Imaging shares,
whether listed on a stock market or not, is 20% for Israeli individuals, unless such shareholder claims a deduction for financing expenses in connection with such Given Imaging shares, in which case
the gain generally will be taxed at a rate of 25%. Additionally, if such shareholder is considered a significant shareholder at any time during the 12-month period preceding such sale, i.e., such
shareholder holds directly or indirectly, including with others, at least 10% of any means of control in the company, the tax rate is 25%. Companies are subject to the corporate tax rate on capital
gains derived from the sale of Given Imaging shares (currently 27%), unless such companies were not subject to the Israeli Income Tax Law (Inflationary Adjustments), 1985 (or certain regulations),
or the Inflationary Adjustments Law, prior to August 10, 2005, in which case the applicable tax rate is 25%. However, the foregoing tax rates will not apply to: (i) dealers in securities; (ii)
shareholders who acquired their Given Imaging shares prior to Given Imagings initial public offering on Nasdaq (that may be subject to a different tax arrangement); and (iii) in some cases,
shareholders who received their Given Imaging shares through the exercise of employee stock options or otherwise as compensation. The tax basis of Given Imaging shares acquired prior to January
1, 2003 by individuals and by companies that were not subject to the Inflationary Adjustments Law will be determined in accordance with the average closing share price on the TASE or Nasdaq, as
applicable, for the three trading days preceding January 1, 2003. However, a request may be made to the tax authorities to consider the actual adjusted cost of the Given Imaging shares as the tax
basis if it is higher than such average price.
Non-Israeli residents. Non-Israeli residents generally will be exempt from capital gains tax on the sale of the Given Imaging shares, provided that such shareholders did not acquire their Given
Imaging shares prior to Given Imagings initial public offering and that the gains did not derive from a permanent establishment of such shareholders in Israel. However, non-Israeli corporations will
not be entitled to such exemption if Israeli residents (i) have a controlling interest of 25% or more in such non-Israeli corporation, or (ii) are the beneficiary of, or are entitled to, 25% or more of
the revenues or profits of such non-Israeli corporation, whether directly or indirectly. In addition, pursuant to the Convention between the Government of the United States of America and the Government of Israel with Respect to Taxes on Income, as amended, or the U.S.-
Israel Tax Treaty, the sale, exchange or disposition of Given Imaging shares by a person who (i) holds the Given Imaging shares as a capital asset, (ii) qualifies as a resident of the United States
within the meaning of the U.S.-Israel Tax Treaty, and (iii) is entitled to claim the benefits afforded to such U.S. resident by the U.S.-Israel Tax Treaty (such person is referred to as a U.S. Treaty
Resident), generally will not be subject to Israeli capital gains tax unless such U.S. Treaty Resident held, directly or indirectly, Given Imaging shares representing 10% or more of the voting power of
Given Imaging during any part of the 12-month period preceding the sale, exchange or disposition, subject to certain conditions, or the capital gains can be allocated to a permanent establishment of
such U.S. Treaty Resident in Israel. If the exemption is not available, such sale, exchange or disposition would be subject to Israeli capital gains tax to the extent applicable. Under the U.S.-Israel tax
Treaty, such U.S. Treaty Resident would be permitted to claim a credit for Israeli income tax against the U.S. federal income tax imposed on the disposition, subject to the limitations in the U.S. tax
laws applicable to foreign tax credits. Israeli Withholding Tax. The gross proceeds payable to a tendering shareholder in the offer generally will be subject to Israeli withholding tax at the rate of 20% for individuals or 25% in the
case of corporations, of the shareholders gain on such sale. An approval from the ITA was obtained with respect to the withholding tax rates applicable to shareholders as a result of the purchase of
Given Imaging shares pursuant to the offer. The approval provides, among other things, that: (1) tendering shareholders who acquired their Given Imaging shares after Given Imagings initial public offering on the Nasdaq and who, certify that they are NOT residents of Israel (and, in
the case of a corporation, that no Israeli resident(s) (x) holds 25% or more of the means of control such corporation or (y) is the beneficiary of, or is entitled to, 25% or more of the revenues or
profits of such corporation, whether directly or indirectly) will not be subject to Israeli withholding tax; (2) eligible Israeli brokers or financial institutions holding Given Imaging shares solely on behalf of tendering shareholders will not be subject to Israeli withholding tax; (3) tendering shareholders who are Israeli residents and who acquired their Given Imaging shares prior to Given Imagings initial public offering on Nasdaq, will be subject to Israeli withholding
tax at a rate of 25% of the amount received by the tendering shareholder; (4) tendering shareholders who are NOT residents of Israel and who acquired their Given Imaging shares prior to Given Imagings initial public offering on Nasdaq, will be subject to Israeli
withholding tax at a rate of 25% of the amount received by the tendering shareholder, unless the tendering shareholder submits an A-114 Form approving such shareholders residence in a country
with whom Israel has a tax treaty which exempts Israeli capital gains tax, duly signed by the tendering shareholder and authorized by the tax authority of such country, in which event such tendering
shareholder will not be subject to Israeli withholding tax; and (5) tendering shareholders who are not described in clauses (1),(2), (3) and (4) above, will be subject to Israeli withholding tax at a fixed rate of 8.61% of the amount received by the tendering
shareholder pursuant to the offer. Notwithstanding the foregoing, should any tendering shareholder present us with a valid approval from the ITA applying withholding tax at a lesser rate than those described above or otherwise
granting a specific exemption from Israeli withholding tax, we will act in accordance with such approval.
More specifically, based on the approval, if a Given Imaging shareholder tenders its Given Imaging shares to:
the U.S. Depositary, the U.S. Depositary may be required to withhold 25% of the gross proceeds payable to such shareholder pursuant to the offer, unless such shareholder, upon the terms and conditions set forth in the Letter of Transmittal, either:
certify, by completing the Declaration Form (Declaration of Status for Israeli Income Tax Purposes), or the Declaration Form, included in the Letter of Transmittal or otherwise delivered to
such shareholder, that (1) such shareholder is NOT a resident of Israel for purposes of the Ordinance, and if it is a corporation that is NOT a resident of Israel that Israeli residents
are NOT controlling shareholders (as defined under Section 68A of the Ordinance) of such corporation, nor are Israeli residents the beneficiaries of, and are not entitled to, 25% or more
of such corporations revenues or profits, whether directly or indirectly and either (A) acquired their Given Imaging shares after Given Imagings initial public offering on Nasdaq (i.e., after
October 3, 2001), or (B) acquired their Given Imaging shares prior to Given Imagings initial public offering on Nasdaq and submit an A-114 Form approving such shareholders residence in
a country with whom Israel has a tax treaty, which exempts Israeli capital gains tax, duly signed by the tendering shareholder and authorized by the tax authority of such country, or (2) such
shareholder is a bank, broker or financial institution resident in Israel that (A) is holding the Given Imaging shares solely on behalf of beneficial shareholder(s) (so-called street name
holders) and (B) is subject to the provisions of the Ordinance and regulations promulgated thereunder relating to the withholding of Israeli tax, including with respect to the gross proceeds
(if any) paid by such shareholder to the beneficial shareholder(s) with respect to the Given Imaging shares tendered by such shareholder on their behalf. In such case, the U.S. Depositary
will not withhold any Israeli withholding tax from the gross proceeds payable to you pursuant to the offer; or provide the U.S. Depositary, with a copy (which shall not constitute notice) to Gross, Kleinhendler, Hodak, Halevy, Greenberg & Co., our legal counsel in Israel, at its address set forth on
the back cover of this offer to purchase, a valid certificate from the ITA entitling such shareholder to an exemption or a specified withholding tax rate, referred to as the ITA Waiver. In
such case, the U.S. Depositary will withhold Israeli withholding tax (or not withhold, if such shareholder is entitled to an exemption) from the gross proceeds payable to it pursuant to the
offer in accordance with such ITA Waiver; or certify, by completing the Declaration Form, that (1) such shareholder is a resident of Israel and acquired his Given Imaging shares after Given Imagings initial public offering on Nasdaq
(i.e., after October 3, 2001). In such case, the U.S. Depositary will withhold 8.61% from the gross proceeds payable to such tendering shareholder pursuant to the offer.
the Israeli Depositary, and such shareholder
holds its Given Imaging shares through a TASE member, such TASE member will withhold Israeli income tax, if applicable, at the rate of up to 20% for individuals and up to 25% for
corporations, of the gain realized by such shareholder from the sale of Given Imaging shares in the offer, in accordance with the Israeli Income Tax Regulations (Withholding from
Consideration, Payment or Capital Gains on the Sale of a Security or Forward Transaction), 5763-2000; or is named as a holder of Given Imaging shares in the Register of Shareholders of Given Imaging in Israel, the Israeli Depositary may be required to withhold 25% if the Given Imaging
shares were acquired prior to Given Imagings initial public offering on Nasdaq of the amount received by the tendering shareholder pursuant to the offer, unless such shareholder provides
the Israeli Depositary, with a copy (which shall not constitute notice) to Gross, Kleinhendler, Hodak, Halevy, Greenberg & Co., our legal counsel in Israel, at its address set forth on the back
cover of this offer to purchase, with a valid ITA Waiver, in which case, the Israeli Depositary will withhold Israeli withholding tax (or not withhold, if such shareholder is entitled to an
exemption) from the gross proceeds payable to it pursuant to the offer in accordance with such ITA Waiver.
We recommend that you consult your tax advisors regarding the application of Israeli income and withholding taxes (including eligibility for any withholding tax reduction or exemption, and the
refund procedure). Please note that if a shareholder tenders its Given Imaging shares to the U.S. Depositary and provides a Declaration Form, you also consent to the provision of such Declaration Form to us and
to the ITA in case the ITA so requests for purposes of audit or otherwise. All questions as to the validity, form or eligibility of any Declaration Form or ITA Waiver (including time of receipt) and, subject to applicable law, the withholding of Israeli taxes, will be
determined by us, in our sole discretion. This determination will be final and binding on all parties. We reserve the absolute right to reject any or all Declaration Forms or ITA Waivers that we
determine not to be in proper form or pursuant to which the failure to withhold any Israeli taxes may be unlawful. We also reserve, subject to applicable law, the absolute right, in our sole discretion,
to waive any defect or irregularity in any Declaration Form or ITA Waiver of any particular shareholder, whether or not similar defects or irregularities are waived in the case of other shareholders.
None of us, our affiliates, our assigns, the Depositaries, the Information Agent, our Israeli legal counsel or any other person will be under any duty to give notification of any defects or irregularities
or incur any liability for failure to give any notification. An excerpt of the definition of an Israeli resident in the Ordinance is attached as Annex B. The Israeli withholding tax is not an additional tax. Rather, the Israeli income tax liability of shareholders subject to Israeli withholding tax will be reduced by the amount of Israeli tax withheld.
If Israeli withholding tax results in an overpayment of Israeli taxes, the holder may apply to the ITA in order to obtain a refund. However, no assurance is given as to whether and when the ITA will
grant such refund. The foregoing discussion is intended only as a summary and does not purport to be a complete analysis or listing of all potential Israeli tax effects of the offer. We recommend that Given
Imaging shareholders consult their tax advisors concerning the Israeli and non-Israeli tax consequences to them of tendering their shares in the offer. 2. Sources and Amount of Funds The following paragraph, summarizing the terms of the credit lines, is inserted below the paragraph under heading Sources and Amount of Funds on page 32 of the Offer to Purchase. Our
credit line is financed through an agreement, dated May 15, 2008, with Israel
Discount Bank Ltd., or the Bank, to provide Elron with a $30 million
credit line to be utilized within a period of 364 days from the date of the
agreement. During this period, we may draw down loans on the credit line
for a three-year period bearing interest at a rate of three-months LIBOR
+1.3%. We agreed to pay the Bank, during the term of the agreement, a fee
equal to 0.24% per annum on all amounts not utilized under the credit line.
Loans drawn down on the credit line may be repaid early without penalty on
any interest payment date. As
part of the agreement we committed to certain covenants including:
(i) maintaining
a ratio equal to the sum of (1) our cash and cash equivalents, (2) the market
value of our holdings in public companies and (3) short term investments,
to the finance debt, as defined in the agreement, which shall be not less
than three; (ii) obligating
to provide the Bank with any covenant, undertaking and/or lien of any kind,
that may be provided to any other financial institution, all in equal parts, pari
passu with such
financial institution so that the Banks rights will not be harmed; (iii) obligating not to make, or agree to make, loans available to our shareholders and not to repay future loans to shareholders without the prior consent of the Bank, and moreover, any funds
or loans granted or which may be granted to our shareholders shall be subordinated to any debt to or credit from the Bank; and (iv) obligating not to issue dividends to our shareholders without the prior written consent of the Bank. The agreement also includes other customary default terms of credit line arrangements. As of the date of this offer to purchase, we have not utilized this credit line. We currently have no plans
or arrangement to finance or repay any loan to be taken under this credit line.
3. Conditions to the Offer The word threatened in the condition appearing on page 33 under the heading Conditions to the Offer is hereby deleted. The condition currently reads as follows: any action or proceeding instituted or pending by any governmental entity or third party before a court or other authority of competent jurisdiction, domestic or foreign; or 4. Schedule I Schedule I of the Offer to Purchase is hereby restated in its entirety to correct a few positions of directors and executive officers listed and to correct a few typographical errors. SCHEDULE I A. DIRECTORS, EXECUTIVE OFFICERS AND OTHER SENIOR OFFICE HOLDERS OF ELRON, DIC, IDBD AND IDBH The following table sets forth the name, address, age, present principal occupation or employment and material occupations, positions, offices or employments for the past five years, of the
directors, executive officers and other senior office holders (as such term is defined under the Israeli Securities Law) of each of Elron, DIC, IDBD and IDBH. Directors and Executive Officers Unless otherwise indicated, all of Elrons directors, executive officers and other senior office holders are citizens of Israel and their address is 3 Azrieli Center, 42nd Floor, The Triangular Tower,
Tel-Aviv 67023, Israel. Name & Address
Age
Position
Current Principal Occupation & Arie Mientkavich
65
Chairman of the
Board of Directors
Current principal occupation: Chairman of
Elron, Deputy Chairman of Gazit Globe
Ltd. and Chairman of Gazit Globe Israel
(Development) Ltd., a real estate
investment group. Material positions in past 5 years: Deputy
Chairman of IDBH since May 2006 and
Chairman of Clal Tourism Ltd.(1) (Clal
Tourism) since January 2007. Chairman of
Israel Discount Bank Ltd. and several
subsidiaries from 1997 to 2006.
Ami Erel
61
Director
Current principal occupation: President &
Chief Executive Officer of DIC (2),
Chairman of NetVision Ltd. (3), Cellcom
Israel Ltd. (4) and Koor Industries Ltd. (5)
of
Elron Electronic Industries Ltd.
Material Positions in Past 5 Years
Material positions in past 5 years:
Chairman of Elron from November 1999 to
January 2007. Chairman of Cellcom Israel
Ltd. (from October 2005), Chairman of
NetVision Ltd. (from September 2007) and
Chairman of NetVision Ltd. (from January
2008). Chief Executive Officer of Elron
from November 1999 to December 2001.
Chief Executive Officer of NetVision Ltd.
from March until September 2007. Director
of various companies held by DIC (DIC
Group).
Name & Address
Age
Position
Current Principal Occupation & Avraham Asheri
70
Director
Current principal occupation: Director of
companies.
Prof. Yair Beery
51
Director
Current principal occupation:
ProfessorDepartment of Electrical
Engineering, Tel Aviv University.
Yaacov Goldman
52
Director
Current principal occupation: Director of
companies.
Prof. Gabriel Barbash
58
Director
Current principal occupation: Director
General of the Tel Aviv Sourasky Medical
Center.
Nochi Danker (6)
53
Director
Current principal occupation: Chairman and
Chief Executive Officer of IDBH;
Chairman of IDBD, DIC and Clal
Industries and Investments Ltd. (CII);
Chairman of Ganden Holdings Ltd. (7)
(Ganden) and Chairman of affiliates of
Ganden (Ganden Group); businessman
and director of companies.
Material Positions in Past 5 Years
12 Yoshpe Street
Apt. 7
Mevasseret Zion 90805
Israel
Material positions in past 5 years: President
of Israel Discount Bank from November
1991 until July 1998.
6 Sweden Street
Petah Tikva 49317
Israel
Material positions in past 5 years: From
1998 until 2005, worked with Benny
Steinmetzs Group and co-founded STI-
Ventures, a high technology investment
group.
39 Nachlieli Street
Hod Hasharon 45355
Israel
Material positions in past 5 years: From
1991 until 2000, senior partner of
Kesselman and Kesselman (member firm of
PricewaterhouseCoopers).
14 Zisman Street
Ramat Gan 53521
Israel
Material positions in past 5 years: Director
General of the Tel Aviv Sourasky Medical
Center since 1999. Chairman of Teuza
Venture Capital Fund from 2000 to 2003.
3 Azrieli Center
The Triangular Tower,
44th Floor
Tel Aviv 67023
Israel
Material positions in past 5 years: Director
of various companies affiliated with IDBH
(IDB Group) since May 2003; Chairman
and CEO of various companies held by
Ganden; a partner in the law office of
Danker-Lusky (8) until 2004.
Name & Address
Age
Position
Current Principal Occupation & Avraham Fischer
51
Director
Current principal occupation: Executive
Vice President of IDBH, Deputy Chairman
of IDBD, Co-Chief Executive Officer of
CII.
Shay Livnat (10)
49
Director
Current principal occupation: President of
Zoe Holdings Ltd. (11)
Dori Manor* (13)
40
Director
Current principal occupation: Chief
Executive Officer of companies in the
automotive sector of David Lubinski Ltd.
(14) (Lubinski Group).
Ari Bronshtein
38
Director
Current principal occupation: Vice
President of DIC.
Arie Ovadia
59
Director
Current principal occupation: Director of
companies.
Amos Shapira
59
Director
Current principal occupation: Chief
Executive of Cellcom Israel Ltd.
Material Positions in Past 5 Years
3 Azrieli Center
The Triangular Tower,
44th Floor
Tel Aviv 67023
Israel
Material positions in past 5 years: Director
of various companies in the IDB Group
since May 2003; co-managing partner of
Fischer, Behar, Chen, Well, Orion & Co. (9)
since 1982; Deputy Chairman of Ganden
and a director of companies in the Ganden
Group.
26 Shalva Street
Herzlia Pituach 46705
Israel
Material positions in past 5 years: Director
of various companies in the IDB Group,
Taavura group and Avraham Livnat (12)
group of companies.
17 Kerem Hazeim
Street, Savion 56536,
Israel
Material positions in past 5 years: a
director of IDBH, IDBD, CII and DIC
since May 2003; director of various
companies in the Lubinski Group and in
family companies.
Material positions in past 5 years: Vice
President and head of Economics and
Business Development Division of
Bezeqthe Israeli Telecommunications
Company (Bezeq) (15) from 2004 until
2005 and Director of Finance and
Investments at Bezeq from 2000 until 2003.
10 Harav Amiel Street
Tel Aviv 62223
Israel
Material positions in past 5 years:
Chairman of the Phoenix Holdings Ltd.
(16).
10 Hagavish Street
Industrial Zone
Netanya 42140
Israel
Material positions in past 5 years: Chief
Executive officer of El Al Israel Airlines
Ltd. (17) from 2002 to 2005.
Name & Address
Age
Position
Current Principal Occupation & Tida Shamir
47
Director
Current principal occupation:
AttorneyPartner of the law firm, Tida
Shamir & Co, Law Offices since 1992.
Doron Birger
56
President and Chief
Executive Officer
Current principal occupation: President and
Chief Executive Officer of Elron.
Moshe Fourier
60
Vice President and
Chief Technology
Officer
Current principal occupation and material
positions in past 5 years: Vice President
and Chief Technology Officer of Elron.
Rinat Remler
36
Vice President, Chief
Financial Officer
Current principal occupation: Vice
President, Chief Financial Officer of Elron.
Assaf Topaz
37
Vice President
Current principal occupation: Vice
President of Elron.
Yair Cohen
53
Vice President
Current principal occupation: Vice
President of Elron.
Zvika Slovin
42
Vice President
Current principal occupation: Vice
President of Elron.
* Dual citizen of Israel and France. (1) Clal Tourism, a subsidiary of IDBD, is a private Israeli company that deals in the fields of tourism, travel and investment and management of hotels. Its address is 3 Hamelakha St., Tel-Aviv,
67215, Israel. (2) DIC, a subsidiary of IDB Development, is an Israeli company, holding investments in companies located in Israel operating mainly in the fields of advanced technology, industry, real
Material Positions in Past 5 Years
Material positions in past 5 years:
AttorneyPartner of the law firm, Tida
Shamir & Co, Law Offices since 1992.
Material positions in past 5 years: President
and Chief Executive Officer of Elron,
Chairman of Given Imaging Ltd. from
August 2002 until July 2007 and director of
companies held by Elron.
Material positions in past 5 years: Director
of Finance of Elron.
Material positions in past 5 years: Director
of Business Development of Elron.
Mr Topaz is the husband of Michal Topaz,
the daughter of Isaac and Ruth Manor (see
footnote 21).
Material positions in past 5 years: Brigadier
General of the Special Unit 8200, the
central military intelligence unit of the
Israeli Defense Forces since 2001, head of
elite 8200 military intelligence unit
Material positions in past 5 years: Founder
and CEO of Tactile Technologies (Israel)
Ltd. (18); Chief Executive Officer of
Quantomix Ltd. (19)
estate, communications and commerce. Its address is 3 Azrieli Center, Triangular Tower, Tel Aviv 67023, Israel. (3) NetVision Ltd., an affiliate of IDBH, is an Israeli public company whose shares are traded on the TASE. Its main field of activity is providing Internet services and solutions in Israel and
international telephony services. Its address is Omega Centre, Matam, Haifa, Israel. (4) Cellcom Israel Ltd. is an Israeli public company whose shares are traded on the TASE and NYSE; it is a subsidiary of DIC and its main field of activity is providing cellular communications
services in Israel. Its address is 10 Hagavish St., Industrial Zone, Netanya 42507, Israel. (5) Koor Industries Ltd., an affiliate of IDBD, is a public Israeli company whose shares are traded on the TASE; it is one of the largest holding companies in Israel investing in companies active in
a variety of activities in Israel. Its address is 3 Azrieli Center, Triangular Tower, Floor 43, Tel Aviv 67023, Israel. (6) Nochi
Dankner is the brother of Shelly Bergman who holds through a wholly-owned
company approximately 4.23% of the outstanding shares of IDBH and also is
one of the controlling shareholders of Ganden, which controls IDBH. Nochi
Dankner is also the son of Zehava Dankner, a director of DIC, IDBD and IDBH. See Controlling Persons below. (7) Ganden is an Israeli company, holding investments mainly in Israeli companies that operate primarily in the fields of aviation, tourism and real estate. Ganden is controlled by Nochi Dankner
(who is also the Chairman of IDBH, IDBD, DIC and CII) and his sister Shelly Bergman. Ganden holds, directly and through a wholly-owned subsidiary, approximately 52.04% of the
outstanding shares of IDBH. Its address is 3 Azrieli Center, Triangular Tower, Tel Aviv 67023, Israel. (8) Dankner-Lusky is an Israeli law firm that was merged with the Israeli law firm of Goldfarb, Levy, Eran, Meiri, Tzafrir & Co. Its address is 2 Weizmann Street, Tel Aviv 64239, Israel. (9) Fischer, Behar, Chen, Well, Orion & Co. is an Israeli law firm. Its address is 3 Daniel Frisch, Tel Aviv 64731, Israel. (10) Shay Livnat and Zvi Livnat are the sons of Avraham Livnat, who controls Avraham Livnat Ltd. that holds directly and through a wholly-owned subsidiary approximately 12.36% of the outstanding shares of IDBH. See Controlling Persons below. (11) Zoe Holdings is a holding company that manages a diverse portfolio of international telecommunications operations and hi-tech companies. (12) Avraham Livnat, is the controlling shareholder of Avraham Livnat Ltd. and father of Zvi Livnat and Shai Livnat. See Controlling Persons below. (13) Dori
Manor is the son of Isaac and Ruth Manor. See Controlling Persons below. (14) Lubinski is an Israeli company engaged primarily in the import to and marketing in Israel of motor vehicles. Its address is 103 Kahnman Street, Bney Brak 51553, Israel. (15) Bezeq is an Israeli public company whose shares are traded on the TASE, its main field of activity is to supply a variety of communications services in the State if Israel. Its address is 132
Menahem Road, Tel Aviv, Israel. (16) The Phoenix Holding Ltd. is an Israeli public company whose shares are traded on the TASE, its main fields of activity are general and life insurance. Its address is 53 Hashalom Way,
Givatayim 53454, Tel-Aviv, Israel. (17) El Al Israel Airlines Ltd. is an Israeli public company whose shares are traded on the TASE; its main field of activity is the aerial transport of cargo and passengers between Israel and abroad.
Its address is Ben-Gurion Aiport, Lod 70100, P.O. Box 41, Israel. (18) Tactile Technologies (Israel) Ltd. is an Israeli private company; its main field of activity is the development of medical instrumentation. Its address is 10/1 Prof. Menahem Flaut St, Rehovot
76706, Israel. (19) Quantomix
Ltd. is an Israeli private company; its main field of activity is development
which allows imaging of cells in an electronic microscopebiotechnology.
Its address is 12 Hamada St. Rehovot 76703, Israel.
Directors and Executive Officers Unless otherwise indicated, all of DICs directors, executive officers and other senior office holders are citizens of Israel and their address is 3 Azrieli Center, 44th Floor, The Triangular Tower,
Tel-Aviv 67023, Israel. Name & Address
Age
Position
Current Principal Occupation & Nochi Danker
53
Chairman of the
Board of Directors
Current principal occupation: Chairman
and Chief Executive Officer of IDBH;
Chairman of IDBD, DIC and CII;
Chairman of Ganden and companies in
the Ganden Group; businessman and
director of companies.
Avraham Fischer
51
Director
Current principal occupation: Executive
Vice President of IDBH, Deputy
Chairman of IDBD, Co-Chief Executive
Officer of CII.
Zvi Livnat (20)
54
Director
Current principal occupation: Executive
Vice President of IDBH; Co-Chief
Executive Officer of CII. Deputy-
Chairman of IDBD.
Isaac Manor* (21)
67
Director
Current principal occupation: Chairman of
companies in the automotive sector of the
Lubinski Group.
of
Discount Investment Corporation Ltd.
Material Positions in Past 5 Years
3 Azrieli Center
The Triangular Tower,
44th Floor
Tel Aviv 67023
Israel
Material positions in past 5 years:
Director of various companies in the IDB
Group since May 2003; Chairman and
Chief Executive Officer of various
companies in the Ganden Group; and a
partner in the law office of Danker-Lusky
until 2004.
3 Azrieli Center
The Triangular Tower,
45th Floor
Tel Aviv 67023
Israel
Material positions in past 5 years:
Director of various companies in the IDB
Group since May 2003; co-managing
partner of Fischer, Behar, Chen, Well,
Orion & Co. since 1982; Deputy Chairman
of Ganden and a director of affiliates of
Ganden.
3 Azrieli Center
The Triangular Tower,
45th Floor
Tel Aviv 67023
Israel
Material positions in past 5 years:
Director of companies in the IDB Group,
Taavura group and Avraham Livnat
group. Vice PresidentCommerce of
Taavura from 1979 until June 2003.
103 Kahnman Street,
Bney Brak 51553
Israel
Material positions in past 5 years: Deputy
chairman of IDBH and a director of
IDBD, CII and DIC and various
companies in the IDB Group since May
2003; a director of Union Bank of Israel
Ltd. (22); a director of various companies
in the Lubinski group and in family
companies.
Name & Address
Age
Position
Current Principal Occupation & Dori Manor
40
Director
Current principal occupation: CEO of
companies in the automotive sector of the
Lubinski Group.
Zehava Dankner
75
Director
Current principal occupation: Director of
companies.
Eliahu Cohen
75
Director
Current principal occupation: Director and
Chief Executive Officer of IDBD.
Gideon Lahav
78
Director
Current principal occupation: Director of
companies
Moshe Arad
73
External Director
Current principal occupation: Director of
companies.
Adiel Rosenfeld
54
Director
Current principal occupation:
Representative in Israel of the Aktiva
Group; (27) President of the Haifa
University Friends Association.
Material Positions in Past 5 Years
17 Kerem Hazeim
Street, Savion 56536,
Israel
Material positions in past 5 years:
Director of IDBH, IDBD, CII and DIC
since May 2003; a director of Elron since
August 2003; and a director of various
companies in the Lubinski Group and in
family companies.
64 Pinkas Street,
Tel Aviv 62157,
Israel
Material positions in past 5 years:
Member of the executive committee of
Beautiful Israel Council; Director of
companies in the IDB Group.
Material positions in past 5 years: Chief Executive Officer of
IDBH from February 2003 until
December 2003; a director of IDBH,
IDBD, Property and Building Corporation
Ltd. (PBC) (23), CII and DIC;
Chairman of CIEH until March 2008.
The father of Raanan Cohen (a Vice
President of DIC).
124 Ehad Haam Street,
Tel Aviv 65208
Israel
Material positions in past 5 years:
Director of DIC; director of Cellcom
Israel Ltd. from 2002 until 2004 and in
2005; director of Koor Industries Ltd, Paz
Oil Company Ltd. (24) and the First
International Bank of Israel Ltd. (25)
14 Shay Agnon Street,
Tel Aviv 65208,
Israel
Material positions in past 5 years: Vice
President of Hebrew University of
Jerusalem, director and member of audit
committee of Elbit Systems Ltd. (26)
42 HaAlon Street,
Timrat 23840,
Israel
Material positions in past 5 years: A
director of various companies in the IDB
Group since 2004; a member of the board
of governors of the Haifa University.
Name & Address
Age
Position
Current Principal Occupation & Gideon Dover
63
External Director
Current principal occupation: Chief
Executive Officer of Dover Medical and
Scientific Equipment Ltd. (28)
Prof. Niv Ahituv
64
External Director
Current principal occupation: Professor at
the Faculty of Management in the Tel
Aviv University.
Jacob Schimmel
45
Director
Current principal occupation: Co-
Managing Director of UKI Investments.
(31)
Refael Bisker
56
Director
Current principal occupation: Chairman of
PBC, Co-Chairman of Shufersal Ltd.
Shaul Ben Zeev
61
Director
Current principal occupation: Chief
Executive Officer of Avraham Livnat Ltd.
and Director of Business Development of
Taavura Holdings Ltd. (32)
Ami Erel
61
President & Chief
Executive Officer
Current principal occupation: President &
Chief Executive Officer of DIC, Chairman
of NetVision Ltd., Cellcom Israel Ltd. and
Koor Industries Ltd.
Oren Lieder
59
Senior Vice
President
Current principal occupation: Senior Vice
President of DIC.
Material Positions in Past 5 Years
11 Hamaalot Street,
Herzliya B 46583,
Israel
Material positions in past 5 years:
Director of I. B. T. International Business
Technology Ltd. (29) and Quantum
Technologies Ltd. (30)
Tel Aviv University
Building
Tel Aviv University
69978,
Israel
Material positions in past 5 years:
Director of companies.
17 High Field Gardens
London W11 9HD
United Kingdom
Material positions in past 5 years:
Director of various companies in the UKI
Investments group and IDB Group.
Material positions in past 5 years:
Director of various companies in the IDB
Group.
Taavura Junction,
Ramle, 72102,
Israel
Material positions in past 5 years:
Director of various companies in the IDB
Group since 2003 as well as companies in
the Avraham Livnat group and other
companies.
Material positions in past 5 years:
Chairman of Elron from November 1999
to January 2007; Chief Executive Officer
of NetVision Ltd. from March until
September 2007, director of various
companies in the DIC Group.
Material positions in past 5 years: Vice
President and Chief Financial Officer of
DIC. Director of various companies in the
DIC Group.
Name & Address
Age
Position
Current Principal Occupation & Raanan Cohen
40
Vice President
Current principal occupation: Vice
President of DIC. Chief Executive Officer
of Koor Industries Ltd.
Michel Dahan
50
Vice President &
Chief Financial
Officer
Current principal occupation: Vice
President & Chief Financial Officer of DIC.
Ari Bronshtein
38
Vice President
Current principal occupation: Vice
President of DIC.
Dr. Yochai Rafaelli
41
Vice President
Current principal occupation: Vice
President of DIC.
Motti Berenstain
34
Comptroller
Current principal occupation: Comptroller
of DIC.
Itzhak Ravid
53
Internal Auditor
Current principal occupation: Senior
Partner of Raveh, Ravid and Co.,
Accountants.
* Dual citizen of Israel and France. (20) See footnote 10. (21) Isaac Manor is the husband of Ruth Manor, who is the controlling shareholder of Manor Holdings B.A. Ltd. (that holds directly and through a majority-owned subsidiary 12.35% of the
outstanding shares of IDBH) and they are the parents of Dori Manor. See Controlling Persons below. (22) Union Bank of Israel Ltd. is an Israeli commercial bank. Its address is 6 Ahuzat Bait Street, Tel Aviv 65143, Israel.
Material Positions in Past 5 Years
Material positions in past 5 years: Chief
Executive Officer of Scailex Corporation
Ltd. (33) from 2004 until 2006 and
director of various companies in the DIC
Group.
Material positions in past 5 years: Vice
President & Comptroller of DIC.
Material positions in past 5 years: Vice
President and head of Economics and
Business Development Division of Bezeq
from 2004 until 2005 and Director of
Finance and Investments at Bezeq from
2000 until 2003.
Material positions in past 5 years:
Director of Business Development at
DIC; Lecturer of business management at
the Tel Aviv University.
Material positions in past 5 years:
Certified Accountant at DIC.
32 A Habarzel Street
Tel Aviv 69710
Material positions in past 5 years: Senior
Partner of Raveh, Ravid and Co.,
accountants since 1988. Internal Auditor
of Hamlet (IsraelCanada) Ltd. and the
Israeli Institute for Democracy; director of
various companies.
(23) PBC is an Israeli real-estate company operating in the fields of revenue-generating assets, residential construction and infrastructures. Its address is 2 Weizmann Street, Tel Aviv 64239, Israel. (24) Paz Oil Company Ltd. is an Israeli public company whose shares are traded on the TASE, its main fields of activity are fueling and trade, direct marketing and refinement. Its address is 12 Giborey Israel St., Netanya 42504, Israel. (25) First International Bank of Israel Ltd. is an Israeli commercial bank. Its address is 9 Ehad Haam St. Shalom Tower, Tel-Aviv 65251, Israel. (26) Elbit Systems Ltd. is an Israeli public company whose shares are traded on the TASE and Nasdaq; its main fields of activity is the development and manufacturing of weapons systems and
electronics for the military field. Its address is Science Industries Center, Haifa 31053, Israel. (27) The Aktiva Group is an international organization engaged, through its group companies, primarily in financial investments and services. Its principal offices address is Aktiva Holdings BV,
Strawinskylaan 1001, Amsterdam, The Netherlands 1077XX. (28) Dover Medical and Scientific Equipment Ltd. is an Israeli private company; its main field of activity is import and marketing of medical and science equipment. Its address is 11 Hamaalot St.,
Herziliya 46583, Israel. (29) I. B. T. International Business Technology Ltd. is a private Israeli company; its main fields of activity are engineering and development. Its address is 10 Karlibach St., Tel-Aviv 67132, Israel. (30) Quantum Technologies Ltd. is an Israeli private company; its main field of activity is the import and marketing of medical equipment. Its address is 11 Hamaa lot St., Herziliya 46583, Israel. (31) The UKI Investment Group is an international investment group based in London, U.K., and is engaged primarily in holding investments mainly in companies that operate in the field of real
estate. Its address is 54-56 Euston Street, London NW1 2ES, United Kingdom. (32) Taavura Holdings Ltd. is an Israeli company, engaged in road haulage and logistics and holds investments in Israeli companies that operate in various commercial and industrial activities. Its
address is P.O.B. 320, Industrial Zone, Ramle 72102, Israel. (33) Scailex Corporation Ltd. is an Israeli public company whose shares are traded on the TASE and OTCBB; its main fields of activity is the management of its financial assets and locating business
opportunities. Its address is 16 Shenkar St., Herzlia Pituach 46120, Israel. Directors and Executive Officers Unless otherwise indicated, all of IDBD directors, executive officers and other senior office holders are citizens of Israel and their address is 3 Azrieli Center, 44th Floor, The Triangular Tower,
Tel-Aviv 67023, Israel. Name & Address
Age
Position
Current Principal Occupation & Nochi Danker
53
Chairman of the
Board of Directors
Current principal occupation: Chairman
and Chief Executive Officer of IDBH;
Chairman of IDBD, DIC and CII;
Chairman of Ganden and companies in
the Ganden Group; businessman and
director of companies.
of
IDB Development Corporation Ltd. (IDBD)
Material Positions in Past 5 Years
Material positions in past 5 years:
Director of various companies in the IDB
Group since May 2003; Chairman and
Chief Executive Officer of various
companies in the Ganden Group; and a
partner in the law office of Danker-Lusky.
until 2004.
Name & Address
Age
Position
Current Principal Occupation & Irit Izakson
56
Director
Current principal occupation and material
positions in past 5 years: Director of
companies.
Refael Bisker
56
Director
Current principal occupation: Chairman of
PBC, Co-Chairman of Shufersal Ltd.
Avraham Ben Joseph
80
Director
Current principal occupation and material
positions in past 5 years: Director of
companies.
Zehava Dankner
75
Director
Current principal occupation: Director of
companies.
Eliahu Cohen
75
Director & Chief
Executive Officer
Current principal occupation: Chief
Executive Officer of IDBD.
Zvi Livnat
54
Deputy-Chairman of
the Board of
Directors
Current principal occupation: Executive
Vice President of IDBH; Deputy-Chairman of IDBD and Co-Chief
Executive Officer of CII.
Shay Livnat
49
Director
Current principal occupation: President
and founder of Zoe Holdings Ltd. Amos
Malka 55 External Director Current principal
occupation: Director of companies.
Material Positions in Past 5 Years
15 Great Matityahou
Cohen Street,
Tel Aviv 62268,
Israel
Material positions in past 5 years:
Director of various companies in the IDB
Group.
87 Haim Levanon
Street,
Tel Aviv 69345,
Israel
64 Pinkas Street,
Tel Aviv 62157,
Israel
Material positions in past 5 years:
Member of the executive committee of
Beautiful Israel Council; Director of
companies in the IDB Group.
Material positions in past 5 years: Chief
Executive Officer of IDBH from February
2003 until December 2003; a director of
IDBH, IDBD, PBC, CII and DIC;
Chairman of CIEH until March 2008.
3 Azrieli Center
The Triangular Tower
45th Floor
Tel Aviv 67023,
Israel
Material positions in past 5 years:
Director of companies in the IDB Group,
Taavura group and Avraham Livnat
group. Vice PresidentCommerce of
Taavura from 1979 until June 2003.
3 Azrieli Center
The Triangular Tower
45th Floor
Tel Aviv 67023,
Israel
Material positions in past 5 years:
Director of various companies in the IDB
Group, Taavura group and Avraham
Livnat group of companies.
18 Nahal Soreq Street,
Modiin 71700,
Israel
Material positions in past 5 years: Chairman of Albar Mimunit Services
Ltd.
Name & Address
Age
Position
Current Principal Occupation &
(34) from 2005 until 2007. Chief Executive
Officer of the Elul Group Ltd. (35) from
2002 until 2006.
Dori Manor*
40
Director
Current principal occupation: Chief
Executive Officer of companies in the
automotive sector of the Lubinski Group.
Isaac Manor*
67
Director
Current principal occupation: Chairman of
companies in the automotive sector of the
Lubinski Group.
Professor Yoram
Margalioth,
45
External Director
Current principal occupation: Senior
lecturer (expert on tax laws) at the
Faculty of Law in the Tel Aviv
University.
Avraham Fischer
51
Deputy Chairman of
the Board of
Directors
Current principal occupation: Executive
Vice President of IDBH, Deputy
Chairman of IDBD, Co-Chief Executive
Officer of ClI.
Jacob Schimmel
45
Director
Current principal occupation: Co-
Managing Director of UKI Investments. Lior
Hannes 44 Senior Executive
Vice President Current principal
occupation: Senior Executive Vice President of IDBD, Chief Executive
Officer of IDB Investments
Material Positions in Past 5 Years
103 Kahnman Street
Bney Brak 51553,
Israel
Material positions in past 5 years:
Director of IDBH, IDBD and DIC since
May 2003; director of various companies
in the Lubinski Group and in family
companies.
103 Kahnman Street
Bney Brak 51553,
Israel
Material positions in past 5 years: Deputy
chairman of IDBH and a director of
IDBD, DIC and CII and various
companies in the IDB Group since May
2003; a director of Union Bank of Israel
Ltd.; a director of various companies in
the Lubinski Group and in family
companies.
16 Haefroni Street,
Raanana 43724,
Israel
Material positions in past 5 years: Advisor
to the World Bank in 2003. Vice
President of the International Tax
Program at Harvard University from 2002
to 2003.
3 Azrieli Center
The Triangular Tower
45th Floor
Tel Aviv 67023,
Israel
Material positions in past 5 years:
Director of various companies in the IDB
Group since May 2003; co-managing
partner of Fischer, Behar, Chen, Well,
Orion & Co. since 1982; Deputy Chairman
of Ganden and a director of companies in
the Ganden Group.
17 High Field Gardens,
London W11 9HD,
United Kingdom
Material positions in past 5 years:
Director of various companies in the UKI
Investments group.
Name & Address
Age
Position
Current Principal Occupation &
(UK) Ltd.
Ari Raved
55
Vice President
Current principal occupation: Vice
President of IDBD.
Haim Gavrieli
37
Executive Vice
President
Current principal occupation: Executive
Vice President of IDBD.
Dr. Eyal Sogelnik
45
Executive Vice
President & Chief
Financial Officer
Current principal occupation: Executive
Vice President & Chief Financial Officer of
IDBD; Chief Financial Officer of IDBH.
Haim Tabouch
38
Vice President &
Comptroller
Current principal occupation: Vice
President & Comptroller of IDBD;
Comptroller of IDBH.
Inbal Zion
38
Vice President and
Corporate Secretary
Current principal occupation: Vice
President and Corporate Secretary of
IDBD; Corporate Secretary of IDBH.
Ilan Amit
65
Internal Auditor
Current principal occupation: Internal
Auditor of IDBD, IDBH, CII and Clal
Tourism.
Material Positions in Past 5 Years
Material positions in past 5 years:
Director of IDBH, CII and CIEH and
various other companies in the IDB
Group and Ganden Group since 2003.
Chairman of Clal Tourism until January
2007.
Material positions in past 5 years: Vice
President of IDBD; director of companies
in the IDB Group.
Material positions in past 5 years: Vice
President of IDBD until November 2006; personal assistant to Chairman of
the Board of Directors until 2005. Assistant to
the Chairman of Ganden until 2003.
Director of various other companies in
the IDB Group and Ganden group of
companies.
Material positions in past 5 years:
Director of corporations division of Israeli
Securities Authority until 2005. Chief
Accountant of the Israeli Securities
Authority until 2003.
Material positions in past 5 years: Vice
President & Comptroller, Director of Clal
Tourism from 2007; Auditor at Somekh
Chaiken until 2003.
Material positions in past 5 years:
Attorney and partner of Raved, Magrisso,
Benkel & Co., law firm until March 2005.
Name & Address
Age
Position
Current Principal Occupation & Material positions in past 5 years: Internal
Auditor of companies in the IDBD
Group.
* Dual citizen of Israel and France. (34) Albar Mimunit Services Ltd. is an Israeli private company; its main fields of activity are financing activities, leasing and management of a fleet of cars. Its address is 64 Mivza Kadesh St., Bnei
Brak 51200, Israel. (35) Elul Group Ltd. is an Israeli private company; its main field of activity is providing comprehensive services of business development, marketing, sales, consulting, outsourcing management,
technical and engineering after-sales support, program management and ILSIntegrated Logistic Services. Its address is 35 Shaul Hamelkh Ave., Beit America, Tel-Aviv 64927, Israel.
Material Positions in Past 5 Years
Directors and Executive Officers Unless otherwise indicated, all of IDBHs directors, executive officers and other senior office holders are citizens of Israel and their address is 3 Azrieli Center, 44th Floor, The Triangular Tower,
Tel-Aviv 67023, Israel. Name & Address
Age
Position
Current Principal Occupation & Nochi Danker
53
Chairman of the
Board of Directors &
Chief Executive
Officer
Current principal occupation: Chairman
and Chief Executive Officer of IDBH;
Chairman of IDBD, DIC and CII;
Chairman of Ganden and companies in
the Ganden Group; businessman and
director of companies
Refael Bisker
56
Director
Current principal occupation: Chairman of
PBC; Co-Chairman of Shufersal Ltd.
Shaul Ben Zeev
61
Director
Current principal occupation: Chief
Executive Officer of Avraham Livnat Ltd.
Zehava Dankner
75
Director
Current principal occupation: Director of
companies.
Zvi Dvoresky
72
External Director
Current principal occupation: Chief
Executive Officer of Beit Kranot Trust
Ltd. (37)
Lior Hannes
44
Director
Current principal occupation: Senior
Executive Vice President of IDBD; Chief
Executive Officer of IDB Investments
(UK) Ltd. Material positions in past 5 years:
Director of IDBH, CII and CIEH and
various other companies in the IDB
Group and Ganden Group since 2003.
Chairman of Clal Tourism until January
2007.
of
IDB Holding Corporation Ltd. (IDBH)
Material Positions in Past 5 Years
Material positions in past 5 years:
Director of various companies in the IDB
Group since May 2003; Chairman and
CEO of various companies in the Ganden
Group; and a partner in the law office of
Danker-Lusky. until 2004.
Material positions in past 5 years:
Director of various companies in the IDB
Group.
Taavura Junction,
Ramle 72102,
Israel
Material positions in past 5 years:
Director of various companies in the IDB
Group since 2003 as well as other
companies.
64 Pinkas Street,
Tel Aviv 62157,
Israel
Material positions in past 5 years:
Member of the executive committee of
Beautiful Israel Council; Director of
companies in the IDB Group.
12 Harofeh Street
Ahuza, Haifa 34366
Israel
Material positions in past 5 years: Chief
Executive Officer of Beit Kranot Trust
Ltd.
Name & Address
Age
Position
Current Principal Occupation & Eliahu Cohen
75
Director
Current principal occupation: Director and
Chief Executive Officer of IDBD.
Zvi Livnat
54
Director & Executive
Vice President
Current principal occupation: Director &
Executive Vice President of IDBH;
Deputy-Chairman of IDBD and Co-Chief
Executive Officer of CII.
Shmuel Lahman
64
External Director
Current principal occupation: Information
Technology consultant.
Dori Manor*
40
Director
Current principal occupation: CEO of
companies in the automotive sector of the
Lubinski Group.
Isaac Manor
67
Director
Current principal occupation: Chairman of
companies in the automotive sector of the
Lubinski Group.
Arie Mientkavich
65
Vice Chairman
Current principal occupation: Chairman of
Elron, Deputy Chairman of Gazit Globe
Ltd. and Chairman of Gazit Globe Israel
(Development) Ltd., a real estate
investment group.
Material Positions in Past 5 Years
Material positions in past 5 years: Chief
Executive Officer of IDBH from February
2003 until December 2003; a director of
IDBH, IDBD, PBC, CII and DIC;
Chairman of CIEH until March 2008.
3 Azrieli Center
The Triangular Tower
45th Floor
Tel Aviv 67023,
Israel
Material positions in past 5 years:
Director of companies in the IDB group,
Taavura group and Avraham Livnat
group. Vice PresidentCommerce of
Taavura from 1979 until June 2003.
9A Kehillat Gitomer,
Tel Aviv, 69405
Israel
Material positions in past 5 years:
Director of companies
103 Kahnman Street
Bney Brak 51553,
Israel
Material positions in past 5 years: a
director of IDBH, IDBD and DIC since
May 2003; director of various companies
in the Lubinski Group and in family
companies.
103 Kahnman Street
Bney Brak 51553,
Israel
Material positions in past 5 years: Deputy
Chairman of IDBH and a director of
IDBD, DIC and CII and various
companies in the IDB Group since May
2003; a director of Union Bank of Israel
Ltd.; a director of various companies in
the Lubinski Group and in family
companies.
Material positions in past 5 years: Deputy
Chairman of IDBH since May 2006 and
Chairman of Clal Tourism since January
2007. Chairman of Israel Discount Bank
Ltd. and several subsidiaries from 1997 to
2006.
Name & Address
Age
Position
Current Principal Occupation & Meir Rosen
77
Director
Current principal occupation and material
positions in past 5 years: Attorney.
Jacob Schimmel
45
Director
Current principal occupation: Co-Managing Director of
UKI Investments.
Avraham Fischer
51
Executive Vice
President
Current principal occupation: Executive
Vice President of IDBH, Deputy
Chairman of IDBD, Co-Chief Executive
Officer of CII.
Dr. Eyal Sogelnik
45
Chief Financial
Officer
Current principal occupation: Chief
Financial Officer of IDBH; Vice President
& Chief Financial Officer of IDBD.
Haim Tabouch
38
Comptroller
Current principal occupation: Comptroller
of IDBH & Comptroller of IDBD.
Ilan Amit
65
Internal Auditor
Current principal occupation: Internal
Auditor of IDBH, IDBD, CII and Clal
Tourism.
* Dual citizen of Israel and France. (37) Beit Kranot Trust Ltd. is an Israeli private company, whose main field of activity is investments. Its address is 16 Herzl St., Haifa 33121, Israel.
Material Positions in Past 5 Years
8 Openheimer Street,
Ramat Aviv,
Tel Aviv
Israel
17 High Field Gardens,
London W11 9HD,
United Kingdom
Material positions in past 5 years: director
of various companies in the IDB Group.
3 Azrieli Center
The Triangular Tower
45th Floor
Tel Aviv 67023,
Israel
Material positions in past 5 years:
Director of various companies in the IDB
Group since May 2003; co-managing
partner of Fischer, Behar, Chen, Well,
Orion & Co. since 1982; deputy chairman of
Ganden and a director of companies in
the Ganden Group.
Material positions in past 5 years:
Director of corporations division of Israeli
Securities Authority until 2005. Chief
Accountant of the Israeli Securities
Authority until 2003.
Material positions in past 5 years: Vice
President & Comptroller, Director of Clal
Tourism Ltd. from 2007; Auditor at
Somekh Chaiken until 2003.
Material positions in past 5 years: Internal
Auditor of companies in the IDB Group.
B. ELRONS CONTROLLING SHAREHOLDERS DIC and IDBH DIC, an indirect majority owned subsidiary of IDBH owns 48.6% of Elron and has the ability, in effect, to elect the members of Elrons board of directors and to significantly influence its
business. Both DIC and IDBH are Israeli companies. DIC holds investments in various entities, operating primarily in the fields of communications, technologies, industries and commerce. IDBH is a
holding company that, through DIC, holds investments in various entities, operating primarily in the fields of insurance, real estate, high-tech, electronics, communications, industries and commerce. Each of DICs and IDBHs respective shares are listed on the TASE. The principal address of DIC and IDBH is 3 Azrieli Center, Triangular Tower, 44th Floor, Tel Aviv 67023, Israel. C. CONTROLLING PERSONS IDBH is controlled as follows: (i) Ganden Holdings Ltd. (Ganden), a private Israeli company controlled by Nochi Dankner (who is also a director of Elron and the chairman of IDBH and
DIC) and his sister Shelly Bergman. Ganden holds, directly and through a wholly-owned subsidiary, approximately 52.04% of the outstanding shares of IDBH; (ii) Shelly Bergman, who holds through
a wholly-owned company approximately 4.23% of the outstanding shares of IDBH; (iii) Avraham Livnat Ltd. (Livnat), a private Israeli company controlled by Avraham Livnat (whose son, Zvi
Livnat, is a director of IDBH and DIC and whose son, Shay Livnat, is a director of Elron). Livnat holds, directly and through a wholly-owned subsidiary approximately 12.36% of the outstanding
shares of IDBH and (iv) Manor Holdings B.A. Ltd. (Manor), a private company controlled by Ruth Manor (whose husband, Isaac Manor, is the deputy chairman of IDBH and a director of DIC,
and their son, Dori Manor, is a director of IDBH, DIC and Elron). Manor holds directly and through a majority-owned subsidiary 12.35% of the outstanding shares of IDBH. Subsidiaries of Ganden, Livnat and Manor have entered into a shareholders agreement with respect to approximately 31.02%, 10.34% and 10.34%, respectively, of the outstanding shares of
IDBH owned by them, constituting in the aggregate approximately 51.7% of the equity and voting power of IDBH for the purpose of maintaining and exercising control of IDBH as a group. The
term of the shareholders agreement expires in May 2023. Their additional holdings in IDBH are not subject to the shareholders agreement. ITEM 10. FINANCIAL STATEMENTS. (a) and (b) Financial and pro forma information with respect to Elron has not been included in this Schedule TO because Elron believes that such financial statements are not material to the decision
of holders of Shares whether to sell, tender or hold the Shares in the Offer. Elron believes that its financial condition is not material because (i) the consideration offered for the Shares consists
solely of cash, (ii) the Offer is not subject to any financing condition, and (iii) Elron has sufficient sources of cash, including credit lines, to purchase the Shares and, as described in the Offer to
Purchase, (A) the Israeli Depositary has agreed to guarantee Elrons obligation to pay for the Shares tendered in the Offer and (B) to secure this guarantee, Elron has engaged the Israeli Depositary
to act as an escrow agent and, if requested by the Israeli Depositary, will deposit cash into an escrow account in an amount sufficient to pay for the maximum number of Shares that Elron is offering
to purchase in the Offer. In addition, while the financial condition of a bidder may be material when a bidder seeks through a tender offer to acquire a significant equity stake in order to influence
the management and affairs of the target (in which case shareholders of the target may need financial information for the prospective controlling shareholder to decide whether to tender in the offer
or remain a continuing shareholder in the target company with a dominant or controlling shareholder), Elron believes that its financial condition is not material to holders of Shares because Elrons
significant existing equity stake means that the foregoing consequences will not occur as a result of the Offer in that they already exist. As described in the Offer to Purchase, Elron, together with its
affiliates, already exerts substantial influence over Given Imaging and Given Imaging shareholders have had a prior opportunity to become familiar with Elron in light of its significant existing
shareholdings. Moreover, Elron believes that there will be little substantive effect, if any, on such influence as a result of its increasing its ownership, taken together with the ownership of its
affiliates, from 43.5% to 48.5%, with the only practical effects being (besides Elron and its affiliates having a larger investment in Given Imaging) that (i) Elron and its affiliates will no longer be
subject to the special tender offer requirements in Israel (as described in the Offer to Purchase) having crossed the 45% threshold and (ii) if Elron, together with its affiliates, increases its ownership
from 43.5% to 48.5%, it will almost have sufficient voting power to guarantee the outcome of resolutions submitted to the shareholders of Given Imaging. In this regard, Elron notes that under the
provisions of the Israeli Companies Law, (i) special disinterested shareholder approval requirements apply to transactions between Elron (or its affiliates) and Given Imaging or transactions of Given
Imaging in which Elron (or its affiliates) has an interest (other than solely through Elrons ownership of Given Imaging shares), where such transactions are material to Given Imaging, or not in its
ordinary course of business or not on market terms, thus ensuring that Elron or its affiliates will not be able to use a near majority voting position to effectively approve transactions in which it or its
affiliates have an interest by vote of Elron and its affiliates alone and (ii) the voting requirements for resolutions in shareholder meetings are measured off of a percentage of votes cast. Elron is a
public reporting company, it is subject to the periodic reporting requirements of the Exchange Act and files its reports on EDGAR. ITEM 12. EXHIBITS.
NO.
DESCRIPTION
(a)(1)(A) Offer to Purchase dated May 16, 2008. (a)(1)(B) Letter of Transmittal. (a)(1)(C) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. (a)(1)(D) Letter to Clients for use by Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. (a)(1)(E) Guidelines for Certification of Taxpayer Identification Number on Substitute W-9. (a)(1)(F) Notice of Objection. (a)(1)(G) Declaration Form (Declaration of Status for Israeli Income Tax Purposes). (a)(5)(A) Text of Press Release issued by Elron on May 16, 2008. (a)(5)(B) Form of Cover of Mifrat filed with the Israeli Securities Authority on May 16, 2008.* (a)(5)(C) Form of Acceptance Notice and Notice of Objection filed with the Israeli Securities Authority on May 16, 2008.* (b)
Not applicable.
(d) Document Setting Forth Terms of Registration Rights Agreement dated July 18, 2007.
(e)
English summary of Credit Line Agreement. (g)
Not applicable.
(h)
Not applicable.
*
English translation from Hebrew.
Previously filed.
SIGNATURE After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
ELRON ELECTRONIC INDUSTRIES LTD.
By: /s/ Doron Birger
By: /s/ Rinat Remler
Name: Doron Birger
Name: Rinat Remler Dated: June 4, 2008
Title: President & Chief Executive Officer
Title: Vice President & Chief Financial Officer
EXHIBIT INDEX
NO.
DESCRIPTION
(a)(1)(A) Offer to Purchase dated May 16, 2008. (a)(1)(B) Letter of Transmittal. (a)(1)(C) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. (a)(1)(D) Letter to Clients for use by Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. (a)(1)(E) Guidelines for Certification of Taxpayer Identification Number on Substitute W-9. (a)(1)(F) Notice of Objection. (a)(1)(G) Declaration Form (Declaration of Status for Israeli Income Tax Purposes). (a)(5)(A) Text of Press Release issued by Elron on May 16, 2008. (a)(5)(B) Form of Cover of Mifrat filed with the Israeli Securities Authority on May 16, 2008.* (a)(5)(C) Form of Acceptance Notice and Notice of Objection filed with the Israeli Securities Authority on May 16, 2008.* (b)
Not applicable.
(d) Document Setting Forth Terms of Registration Rights Agreement dated July 18, 2007.
(e)
English summary of Credit Line Agreement. (g)
Not applicable.
(h)
Not applicable.
* English translation from Hebrew. Previously filed.
Exhibit (e)
English Summary of Credit Lines Agreement
On May 15, 2008, Elron Electronic Industries Ltd. (Elron) entered into an agreement with Israel Discount Bank Ltd. (the Bank) to provide Elron with a $30 million credit line. The credit line is to be utilized within a period of 364 days from the date of the agreement. During this period, Elron may draw down loans on the credit line for a three-year period bearing interest at a rate of three-months LIBOR +1.3% . Elron agreed to pay the Bank, during the term of the agreement, a fee equal to 0.24% per annum on all amounts not utilized under the credit line. Loans drawn down on the credit line may be repaid early without penalty on any interest payment date.
As part of the agreement, Elron committed to certain covenants including:
(i) | maintaining a ratio equal to the sum of (1) Elrons cash and cash equivalents, (2) the market value of Elrons holdings in public companies and (3) short term investments, to the finance debt, as defined in the agreement, which shall be not less than three; | |
(ii) | obligating to provide the Bank with any covenant, undertaking and/or lien of any kind, that may be provided to any other financial institution, all in equal parts, pari passu with such financial institution so that the Banks rights will not be harmed; | |
(iii) | obligating not to make, or agree to make, loans available to Elrons shareholders and not to repay future loans to shareholders without the prior consent of the Bank, and moreover, any funds or loans granted or which may be granted to Elrons shareholders shall be subordinated to any debt to or credit from the Bank; and | |
(iv) | obligating not to issue dividends to Elrons shareholders without the prior written consent of the Bank. |
The agreement also includes other customary default terms for credit line arrangements.
June 4, 2008
Securities and Exchange Commission
Division of Corporation Finance
100 F Street, NE
Washington, DC 20549
Attn: Peggy Kim, Attorney-Adviser
Re: | Given Imaging Ltd. | |
Schedule TO filed May 16, 2008 | ||
By Elron Electronic Industries Ltd. | ||
File No. 005-62155 |
Ladies and Gentlemen:
In connection with the response of Elron Electronic Industries Ltd. (the “Company”) to the comment letter dated May 29, 2008 (the “Comment Letter”), setting forth the comments of the staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”), we hereby acknowledge that:
• | The Company is responsible for the adequacy and accuracy of the disclosure in the filings related to the above-captioned Schedule TO; | |
• | Staff comments or changes to disclosure in response to Staff comments do not foreclose the Commission from taking any action with respect to the filings related to the above-captioned Schedule TO; and | |
• | the Company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States. |
Very truly yours, | ||
ELRON ELECTRONIC INDUSTRIES LTD. | ||
By: | /s/ Doron Birger | |
Name: Doron Birger | ||
Title: President & Chief Executive Officer |
RICHARD H. GILDEN
PARTNER
PHONE 212-715-9486
FAX 212-715-8085
RGILDEN@KRAMERLEVIN.COM
June 4, 2008
VIA EDGAR AND FEDERAL EXPRESS
United States Securities and Exchange Commission
Division of Corporation Finance
100 F Street, N.E.
Washington, D.C. 20549
Attn: Peggy Kim, Attorney-Adviser
Re: | Given Imaging Ltd. | |
Schedule TO filed May 16, 2008 | ||
By Elron Electronic Industries Ltd. | ||
File No. 005-62155 |
Ladies and Gentlemen:
On behalf of Elron Electronic Industries Ltd. (“Elron”), we provide Elron’s responses to the letter dated May 29, 2008 (the “Comment Letter”) to me, setting forth the comments of the staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”) relating to the above referenced filing.
This letter sets forth Elron’s responses to the Staff’s comments. For your convenience, the Staff’s comments contained in the Comment Letter have been restated below in their entirety, with the responses to each comment set forth immediately under the applicable comment. The headings and numbered paragraphs in this letter correspond to the headings and numbered paragraphs of the Comment Letter. Please note that Elron has included in Amendment No. 1 to the Schedule TO (“Amendment No. 1”), which is being submitted simultaneously with this letter, the revisions to the Schedule TO described in its responses to the Staff’s comments in this letter.
For your convenience we are submitting a copy of the Offer to Purchase marked to show changes from the prior version. All references herein to page numbers in the Offer to Purchase are to page numbers in this marked version.
Schedule TO-T
1. | Please tell us what consideration was given to including Discount Investment Corporation Ltd. and IDB Holding Corporation Ltd. We note that these entities are identified as controlling-shareholders of the named bidder Elron Electronics, which is described on page i of the offer to purchase as a "high technology holding company." In addition to these entities, other persons or entities who control them may also need to be included as bidders in the tender offer. Please refer to the factors discussed in section II.D.2 of the Current Issues and Rulemaking Projects Outline (November 2000) in your analysis of whether other bidders should be included. To the extent you determine not to add additional bidders, please provide your analysis in your response letter. To the extent that you add additional parties as bidders, please be aware that you must include all of the disclosure required by Schedule TO as to such parties individually. You may also be required to disseminate revised offer materials and to extend the length of the offer, depending on the materiality of any new information provided. |
Response:
Elron has given considerable consideration to the inclusion of Discount Investment Corporation Ltd. (“DIC”) and IDB Holding Corporation Ltd. (“IDBH”) as bidders, along with Elron, in the tender offer. While Elron is 48.6% owned by DIC and DIC is a majority owned subsidiary of IDBH, the guidance (the “Guidance”), set forth in Section II.D.2 of the Current Issues and Rulemaking Projects Outline (November 2000), is clear that share ownership is not the only dispositive issue to be considered in determining whether a parent company qualifies as a bidder. The Guidance states that “the fact that the parent company or other persons control the purchaser through share ownership does not mean that the entity is automatically viewed as a bidder.” Rather, one should look to the controlling party's role in the tender offer. For instance, the Guidance suggests a few areas of possible inquiry including: (i) whether the parent initiated, structured or negotiated the terms of the tender offer or (ii) whether the parent provided the financing for the tender offer. The Guidance offers a few additional relevant factors; however, none of these factors apply to DIC's or IDBH's role in the tender offer, as Elron’s management, under the supervision of its board of directors, initiated, structured and negotiated the transaction on its own without the involvement of DIC, IDBH or any other entity in the IDB Group of companies for that matter, as fully disclosed in the Offer to Purchase, under “Background to the Offer—Background.” The tender offer is being fully funded from Elron’s own financial resources and credit lines, without the benefit of financial support from its shareholders.
The Guidance further articulates in its conclusion that the Staff ordinarily will not go further up the chain of ownership to analyze whether an entity’s control persons are bidders if the named bidder is an established entity with substantive operations and assets separate from those related to the offer. Elron is an established company with its own structure, operations, assets and goals separate and apart from DIC, IDBH’s or any other entity in the IDB Group of companies. Moreover, the offer to purchase, under “Background to the Offer” and “Schedule I,” clearly provides adequate information about DIC, IDBH and the other members of the IDB Group of companies that could be deemed to control Elron. Therefore, shareholders of the subject company have been provided full disclosure of the details of all related parties whether or not they are designated as bidders in the offer to purchase.
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Item 10. Financial Statements
2. | We note that the offeror is not a public company and that the offer is not for all outstanding securities of the subject class. Refer to Instruction 3 to Item 13 of Schedule TO. Please provide further analysis as to why you believe that the financial condition of the bidder is not material to a shareholder's decision to participate in the offer. In this regard, please explain how Given shareholders “have had a prior opportunity to become familiar with Elron in light of its significant shareholdings,” when it appears that financial information for Elron is not publicly available. |
Response:
As stated throughout the offer to purchase, the offeror, Elron, is a public company and its shares are listed on the Nasdaq Global Select Market and the Tel Aviv Stock Exchange Ltd. under the ticker symbol “ELRN.” Elron’s shares are also registered under Section 12(b) of the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”), and is subject to the periodic reporting requirements of the Exchange Act. Since Elron is a public company and its financial information is publicly available through the Commission, shareholders of Given Imaging would have had prior opportunity to become familiar with Elron, given its significant shareholding, and shareholders of Given Imaging continue to have access to Elron’s public filings that are currently available through the Commission’s website.
Further, Elron has revised Item 10 to Schedule TO to state that it is a public reporting company, it is subject to the periodic reporting requirements of the Exchange Act and files its reports on EDGAR.
Offer to Purchase
Material U.S. Federal Income Tax and Israeli Income Tax Considerations, page 22
3. | Please revise throughout your document to clarify that you are disclosing material tax consequences, rather than considerations. |
Response:
Elron has revised the disclosure throughout the offer to purchase in response to the Staff’s comment.
Sources and Amount of Funds, page 32
4 | We note that some of the funds used to purchase tendered securities will be from existing credit lines. Please revise to include the information required by Item 1007(d) of Regulation M-A. about these credit lines. Refer to Item 7 of Schedule TO. In addition, please file these credit lines or indicate where they have been previously filed. Refer to Item 1016(b) of Regulation M-A. |
Response:
Elron has revised the disclosure in Section 10, on page 32 in response to the Staff’s comment. An English summary of the credit line agreement is being submitted simultaneously with this letter. Elron will also file the same as an exhibit to Schedule TO.
3
Conditions to the Offer, page 32
5. | Please note that a tender offer may be subject only to conditions that are not within the direct or indirect control of the bidder and that are drafted with sufficient specificity to permit objective verification that the conditions have been satisfied. Please revise the condition regarding any “threatened” action or proceeding since it is unclear how this type of action could be objectively determined. |
Response:
Elron has revised the disclosure in Section 11, on page 32 in response to the Staff’s comment, by deleting the word “threatened.”
6. | Please refer to the third-to-last paragraph relating to your failure to exercise any of the rights described in this section. This language implies that once a condition is triggered, you must decide whether or not to assert it. Please note that when a condition is triggered and you decide to proceed with the offer anyway, the staff believes that this constitutes a waiver of the triggered condition. Depending on the materiality of the waived condition and the number of days remaining in the offer, you may be required to extend the offer and recirculate new disclosure to security holders. You may not, as this language suggests, simply fail to assert a triggered condition and effectively waive it without officially doing so. Please confirm your understanding supplementally, or revise your disclosure. |
Response:
Elron confirms that it understands that if a condition is triggered and it decides to proceed with the offer, that the Staff will interpret such action as a waiver of the triggered condition. Elron further confirms that it understands that depending on the materiality of the waived condition and the number of days remaining in the offer, it may be required to extend the offer and re-circulate new disclosure to shareholders of Given Imaging. Elron understands that it may not simply fail to assert a triggered condition and effectively waive it without officially doing do.
If you have any questions or comments regarding the responses set forth herein, please do not hesitate to call Richard Gilden at (212) 715-9486, John Bessonette at (212) 715-9182 or Terryl Simeina at (212) 715-9168.
Sincerely, | |
/s/ Richard H. Gilden | |
Richard H. Gilden |
cc: Donna Gershowitz, Elron Electronic Industries, Ltd.
4