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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13E-3/A
(Amendment No. 1)
Rule 13e-3 Transaction Statement
(Pursuant to Section 13(e) of the Securities Exchange Act of 1934)
PEC ISRAEL ECONOMIC CORPORATION
(Name of the Issuer)
DISCOUNT INVESTMENT CORPORATION LTD., PEC ACQUISITION CORPORATION, PEC
ISRAEL ECONOMIC CORPORATION AND IDB DEVELOPMENT CORPORATION LTD.
(Name of Persons Filing Statement)
COMMON SHARES, $1.00 PAR VALUE 705098-10-1
(Title of Class of Securities) (Cusip Number of Class of Securities)
MR. JAMES I. EDELSON
EXECUTIVE VICE PRESIDENT, SECRETARY AND
GENERAL COUNSEL
PEC ISRAEL ECONOMIC CORPORATION
511 FIFTH AVENUE
NEW YORK, NEW YORK 10017
(212) 551-8881
(Name, address and telephone number of person authorized to receive notices
and communications on behalf of the persons filing statement.)
Copy To:
PETER G. SAMUELS, ESQ.
PROSKAUER ROSE LLP
1585 BROADWAY
NEW YORK, NEW YORK 10036-8299
(212) 969-3335
a. [x] The filing of solicitation materials or an information statement
subject to Regulation 14A [17 CFR 240.14a-1 to 240.14b-1], Regulation
14C [17 CRF 240.14c-1 to 240.14c-101] or Rule 13e-3(c) [240.13e-3 (c)]
under the Securities Exchange Act of 1934.
b. [ ] The filing of a registration statement under the Securities Act of
1933.
c. [ ] A tender offer.
d. [ ] None of the above.
Check the following box if the soliciting materials or information
statement referred to in checking box (a) are preliminary copies: [x]
CALCULATION OF FILING FEE
TRANSACTION AMOUNT OF
VALUATION* FILING FEE**
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$102,731,880 $20,546.38
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* Assumes 3,424,396 Common Shares, par value $1.00 per share, of PEC Israel
Economic Corporation (the "Common Shares") will be converted into the right
to receive $30.00 per share in cash.
** The amount of the filing fee, calculated in accordance with 240.0-11 of the
Securities Exchange Act of 1934 equals 1/50th of one percent of the
transaction value.
[x] Check 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: $20,546.38
Form or Registration No.: Schedule 14A Information
Filing Party: PEC Israel Economic Corporation
Date Filed: January 5, 1999
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INTRODUCTION
This Schedule 13E-3 Transaction Statement is being filed by Discount
Investment Corporation Ltd., an Israeli corporation ("DIC"), PEC Acquisition
Corporation, a Maine corporation and wholly-owned subsidiary of DIC ("Merger
Sub"), PEC Israel Economic Corporation, a Maine corporation (the "Company"), and
IDB Development Corporation Ltd., an Israeli corporation ("IDB Development") and
is being filed in connection with an Agreement and Plan of Merger, dated as of
December 15, 1998 ("the Merger Agreement") among DIC, Merger Sub, and the
Company.
The following cross-reference sheet is supplied pursuant to General
Instruction F to Schedule 13E-3 and shows the location in the preliminary proxy
statement filed by the Company with the Securities and Exchange Commission
contemporaneously herewith (including all annexes and schedules thereto)
("Preliminary Proxy Statement") of the information required by Schedule 13E-3 to
be included in response to the items of this Transaction Statement. The
information in the Preliminary Proxy Statement, a copy of which is attached
hereto as Exhibit (d), is incorporated by reference, and the responses to each
item are qualified in their entirety by the information contained in the
Preliminary Proxy Statement. The cross-reference sheet indicates the caption in
the Preliminary Proxy Statement under which the responses are incorporated
herein by reference. If any such item is inapplicable or the answer thereto is
in the negative and is omitted from the Preliminary Proxy Statement, it is so
indicated in the cross-reference sheet.
CROSS-REFERENCE SHEET SHOWING
LOCATION IN PRELIMINARY PROXY STATEMENT
OF INFORMATION REQUIRED BY ITEMS IN SCHEDULE 13E-3
SECTION 13E-3 ITEM LOCATION IN PRELIMINARY PROXY STATEMENT
------------------ ---------------------------------------
1. Issuer and Class of Security Subject to the
Transaction
Item 1(a)...................................... Cover Page and "SUMMARY--Parties to the Merger
Agreement"
Item 1(b)...................................... Cover Page and "INTRODUCTION--Voting at the Special
Meeting and Revocation of Proxies"
Item 1(c)...................................... "SUMMARY--Market Prices and Dividends"
Item 1(d)...................................... "SUMMARY--Selected Summary Financial Information
Concerning the Company" and "SELECTED FINANCIAL
INFORMATION OF THE COMPANY"
Item 1(e)...................................... Not Applicable
Item 1(f)...................................... "TRANSACTIONS BY CERTAIN PERSONS IN
SHARES"
2. Identity and Background
Items 2(a) - (d) and (g)....................... Cover Page; "INTRODUCTION--General;" "SUMMARY
-- Parties to the Merger Agreement;" "OWNERSHIP OF
SHARES;" and "MANAGEMENT OF THE COMPANY,
DIC, IDB DEVELOPMENT, IDB HOLDING, AND
MERGER SUB"
3
SECTION 13E-3 ITEM LOCATION IN PRELIMINARY PROXY STATEMENT
------------------ ---------------------------------------
Items 2(e) and (f)............................. "MANAGEMENT OF THE COMPANY, DIC, IDB
DEVELOPMENT, IDB HOLDING, AND MERGER SUB
-- Directors and Executive Officers of IDB Holding"
3. Past Contacts, Transactions or Negotiations
Item 3(a)(1)................................... "INFORMATION CONCERNING DIC AND MERGER
SUB"
Items 3(a)(2) and (b).......................... "SUMMARY--Background of the Merger;" "--Litigation
Related to the Merger;" "SPECIAL
FACTORS--Background of the Merger;" and "--Certain
Shareholder Litigation"
4. Terms of Transaction
Item 4(a)...................................... "QUESTIONS AND ANSWERS ABOUT THE
MERGER;" "SUMMARY--Purpose and Structure of the
Merger; Reasons for the Merger;" "--Effective Time for
the Merger;" "--Appraisal Rights;" "--Conditions to the
Merger;" "--Termination of the Merger Agreement;"
"--Amending or Waiving Terms of the Merger
Agreement;" "INTRODUCTION--General;" "--Voting at
the Special Meeting and Revocation of Proxies;"
"SPECIAL FACTORS--Interests of Certain Persons in the
Merger;" "--Payment for Shares;" "--The Merger
Agreement;" "--Certain U.S. Federal Income Tax
Consequences of the Merger;" and "--Rights of Dissenting
Shareholders"
Item 4(b)...................................... "SPECIAL FACTORS--Interests of Certain Persons in the
Merger"
5. Plans or Proposals of the Issuer or Affiliate
Items 5(a), (b) and (e)........................ "SUMMARY--Purpose and Structure of the Merger;
Reasons for the Merger;" "--Certain Effects of the Merger;
Plans for the Company after the Merger;" "SPECIAL
FACTORS--Purpose and Effects of the Merger; Reasons
for the Merger;" "--Plans for the Company after the
Merger;" "--Certain Effects of the Merger;" and
"FINANCING OF THE MERGER"
Item 5(c)...................................... "SPECIAL FACTORS--The Merger Agreement" and Annex A to the
Preliminary Proxy Statement
Item 5(d)...................................... "SUMMARY--Financing of the Merger;"
"FINANCING OF THE MERGER;" and Exhibit (a)(1)
Item 5(f)...................................... Not Applicable
Item 5(g)...................................... "SUMMARY--Purpose and Structure of the Merger;
Reasons for the Merger;" "--Certain Effects of the Merger;
Plans for the Company after the Merger;" "SPECIAL
FACTORS--Purpose and Effects of the Merger; Reasons
for the Merger;" and "--Certain Effects of the Merger"
6. Source and Amounts of Funds or Other
Consideration
4
SECTION 13E-3 ITEM LOCATION IN PRELIMINARY PROXY STATEMENT
------------------ ---------------------------------------
Item 6(a)...................................... "SUMMARY--Financing of the Merger;"
"FINANCING OF THE MERGER;" and Exhibit (a)(1)
Item 6(b)...................................... "SPECIAL FACTORS--Fees and Expenses" and
"FINANCING OF THE MERGER"
Items 6(c)..................................... "SUMMARY--Financing of the Merger;"
"FINANCING OF THE MERGER;" and Exhibit (a)(1)
Item 6(d)...................................... Not applicable
7. Purpose(s), Alternatives, Reasons and Effects
Items 7(a) and (c)............................. "QUESTIONS AND ANSWERS ABOUT THE
MERGER;" "SUMMARY--Background of the Merger;"
"--Purpose and Structure of the Merger; Reasons for the
Merger;" "SPECIAL FACTORS--Background of the
Merger;" "--Fairness of the Merger;" "--Position of DIC
and IDB Development Regarding Fairness of the Merger;"
"--Plans for the Company after the Merger;" and
"--Purpose and Effects of the Merger; Reasons for the
Merger"
Item 7(b)...................................... Not Applicable
Item 7(d)...................................... "QUESTIONS AND ANSWERS ABOUT THE MERGER;"
"SUMMARY--Background of the Merger;" "--Purpose and
Structure of the Merger; Reasons for the Merger;"
"--Certain Effects of the Merger; Plans for the
Company after the Merger;" "--Accounting Treatment;"
"--Certain Federal Income Tax Consequences;" "SPECIAL
FACTORS--Background of the Merger;" "--Purpose and
Effects of the Merger; Reasons for the Merger;"
"--Plans for the Company after the Merger;" "--Certain
Effects of the Merger;" "--Accounting Treatment of the
Merger;" and "--Certain U.S. Federal Income Tax
Consequences of the Merger"
8. Fairness of the Transaction
Item 8(a)...................................... "QUESTIONS AND ANSWERS ABOUT THE
MERGER;" "SPECIAL FACTORS-- Recommendation of the
Special Committee and the Company Board;" "--Fairness
of the Merger;" and "--Position of DIC and IDB
Development Regarding Fairness of the Merger"
Item 8(b)...................................... "QUESTIONS AND ANSWERS ABOUT THE
MERGER;" "SUMMARY--Background of the Merger;"
"--Purpose and Structure of the Merger; Reasons for the
Merger;" "--The Fairness Opinion of the Financial
Advisor;" "SPECIAL FACTORS--Background of the
Merger;" "--Fairness of the Merger;" "--Position of DIC
and IDB Development Regarding Fairness of the Merger;"
and "--Purpose and Effects of the Merger; Reasons for the
Merger"
Item 8(c)...................................... "QUESTIONS AND ANSWERS ABOUT THE
MERGER;" "INTRODUCTION--General;" "--Voting at
the Special Meeting and Revocation of Proxies;" and
"SPECIAL FACTORS--Fairness of the Merger"
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SECTION 13E-3 ITEM LOCATION IN PRELIMINARY PROXY STATEMENT
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Item 8(d)...................................... "SUMMARY--Background of the Merger;" "--The
Fairness Opinion of the Financial Advisor;" "SPECIAL
FACTORS--Background of the Merger;" and "--Opinion
of Merrill Lynch"
Item 8(e)...................................... "QUESTIONS AND ANSWERS ABOUT THE
MERGER;" "SPECIAL FACTORS--Recommendation of
the Special Committee and the Company Board;" and
"--Interests of Certain Persons in the Merger"
Item 8(f)...................................... Not Applicable
9. Reports, Opinions, Appraisals and Certain
Negotiations
Items 9(a) and (b)............................. "QUESTIONS AND ANSWERS ABOUT THE
MERGER;" "SUMMARY--Background of the Merger;"
"--The Fairness Opinion of the Financial Advisor;"
"SPECIAL FACTORS--Background of the Merger;" "--Exchange
of Company Shares between IDB Development and DIC;
Assignment of the Merger Agreement;" "--Fairness of the
Merger;" "--Opinion of Merrill Lynch;" "--BT Wolfenshom,
Financial Advisor to IDB Development;" and
Exhibits (b)(1), (b)(2), (b)(3), (b)(4), (b)(5) and (b)(6)
to this Transaction Statement
Item 9(c)...................................... "SPECIAL FACTORS" "--Exchange of Company Shares between
IDB Development and DIC; Assignment of the Merger
Agreement;" "--Opinion of Merrill Lynch;" and "--BT
Wolfenshom, Financial Advisor to IDB Development"
10. Interest in Securities of the Issuer
Item 10(a)..................................... "INTRODUCTION--General;" "SPECIAL FACTORS
--Interests of Certain Persons in the Merger;" and
"OWNERSHIP OF SHARES"
Item 10(b)..................................... Not Applicable
11. Contracts, Arrangements or Understandings
with Respect to the Issuer's Securities........ "QUESTIONS AND ANSWERS ABOUT THE
MERGER;" "SUMMARY--Parties to the Merger
Agreement;" "--Background of the Merger;" "--Purpose
and Structure of the Merger; Reasons for the Merger;"
"--Effective Time for the Merger;" "--Appraisal Rights;"
"--The Fairness Opinion of the Financial Advisor;"
"--Conditions to the Merger;" "--Termination of the
Merger Agreement;" "--Amending or Waiving Terms of the
Merger Agreement;" "SPECIAL FACTORS--Background of the
Merger;" "--Exchange of Company Shares between
IDB Development and DIC; Assignment of the Merger
Agreement;" "--Interests of Certain Persons in the
Merger;" "--The Merger Agreement;" and Annex A to the
Preliminary Proxy Statement
12. Present Intention and Recommendation of
Certain Persons with Regard to the Transaction
6
SECTION 13E-3 ITEM LOCATION IN PRELIMINARY PROXY STATEMENT
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Item 12(a)..................................... Not Applicable
Item 12(b)..................................... "INTRODUCTION--General;" "--Voting at the Special
Meeting and Revocation of Proxies;" "SPECIAL
FACTORS--Recommendation of the Special Committee
and the Company Board;" "--Fairness of the
Merger;"--Position of DIC and IDB Development
Regarding Fairness of the Merger;" "--The Merger
Agreement;" and Annex A to the Preliminary Proxy
Statement
13. Other Provisions of the Transaction
Item 13(a)..................................... "QUESTIONS AND ANSWERS ABOUT THE
MERGER;" "SUMMARY--Appraisal Rights;" SPECIAL
FACTORS--The Merger Agreement;" "--The Rights of
Dissenting Shareholders;" and Annex B to the Preliminary
Proxy Statement
Items 13(b) and (c)............................ Not Applicable
14. Financial Information
Item 14(a)..................................... "SUMMARY--Selected Summary Financial Information
Concerning the Company;" "SELECTED FINANCIAL
INFORMATION OF THE COMPANY;"
"INCORPORATION OF CERTAIN DOCUMENTS BY
REFERENCE;" and Exhibits (g)(1) and (g)(2) to this
Transaction Statement
Item 14(b)..................................... Not Applicable
15. Persons and Assets Employed, Retained or
Utilized
Item 15(a)..................................... "INTRODUCTION--Voting at the Special Meeting and
Revocation of Proxies;" "SPECIAL FACTORS--Plans for
the Company after the Merger;" "--The Merger
Agreement;" "FINANCING OF THE MERGER;" and Annex A to
the Preliminary Proxy Statement
Item 15(b)..................................... "SUMMARY--Background of the Merger;" "--The
Fairness Opinion of the Financial Advisor;" "SPECIAL
FACTORS--Background of the Merger;" "--Opinion of
Merrill Lynch;" and "--Fees and Expenses"
16. Additional Information......................... Preliminary Proxy Statement in its entirety
17. Material to be Filed as Exhibits............... Separately filed with this Schedule 13E-3
ITEM 1. ISSUER AND CLASS OF SECURITY SUBJECT TO THE TRANSACTION.
(a) The name of the issuer of the class of equity security subject to the
Rule 13e-3 transaction is PEC Israel Economic Corporation and the address of its
principal executive offices is 511 Fifth Avenue, New York, New York 10017. The
relevant information set forth on the Cover Page of the Preliminary Proxy
Statement and under the caption "SUMMARY--Parties to the Merger Agreement" is
incorporated herein by reference.
(b) The relevant information set forth on the Cover Page of the Preliminary
Proxy Statement and under the caption "INTRODUCTION--Voting at the Special
Meeting and Revocation of Proxies" is incorporated herein by reference.
7
(c) The relevant information set forth under the caption "SUMMARY--Market
Prices and Dividends" is incorporated herein by reference.
(d) The relevant information set forth under the captions
"SUMMARY--Selected Summary Financial Information Concerning the Company" and
"SELECTED FINANCIAL INFORMATION OF THE COMPANY" is incorporated herein by
reference.
(e) Not Applicable.
(f) The relevant information set forth under the caption "TRANSACTIONS BY
CERTAIN PERSONS IN SHARES" is incorporated herein by reference.
ITEM 2. IDENTITY AND BACKGROUND.
(a) - (d) and (g). This Transaction Statement is being filed by DIC,
Merger Sub, IDB Development, and the Company (the Company being the issuer).
The relevant information set forth on the Cover Page of the Preliminary
Proxy Statement and under the captions "INTRODUCTION--General,"
"SUMMARY--Parties to the Merger Agreement," "OWNERSHIP OF SHARES," and
"MANAGEMENT OF THE COMPANY, DIC, IDB DEVELOPMENT, IDB HOLDING, AND MERGER
SUB" is incorporated herein by reference.
(e) and (f) The relevant information set forth under the caption
"MANAGEMENT OF THE COMPANY, DIC, IDB DEVELOPMENT, IDB HOLDING, AND MERGER
SUB--Directors and Executive Officers of IDB Holding" is incorporated herein
by reference.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS.
(a)(1). The relevant information set forth under the caption "INFORMATION
CONCERNING DIC AND MERGER SUB" is incorporated herein by reference.
(a)(2) and (b). The relevant information set forth under the captions
"SUMMARY--Background of the Merger," "--Litigation Related to the Merger,"
"SPECIAL FACTORS--Background of the Merger," and "--Certain Shareholder
Litigation" is incorporated herein by reference.
ITEM 4. TERMS OF THE TRANSACTION.
(a) The relevant information set forth under the captions "QUESTIONS AND
ANSWERS ABOUT THE MERGER," "SUMMARY--Purpose and Structure of the Merger;
Reasons for the Merger," "--Effective Time for the Merger," "--Appraisal
Rights," "--Conditions to the Merger," "--Termination of the Merger Agreement,"
"--Amending or Waiving Terms of the Merger Agreement," "INTRODUCTION--General,"
"--Voting at the Special Meeting and Revocation of Proxies," "SPECIAL
FACTORS--Interests of Certain Persons in the Merger,"
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"--Payment for Shares," "--The Merger Agreement," "--Certain U.S. Federal Income
Tax Consequences of the Merger," and "--Rights of Dissenting Shareholders" is
incorporated herein by reference.
(b) The relevant information set forth under the caption "SPECIAL
FACTORS--Interests of Certain Persons in the Merger" is incorporated herein by
reference.
ITEM 5. PLANS OR PROPOSALS OF THE ISSUER OR AFFILIATE.
(a), (b) and (e). The relevant information set forth under the captions
"SUMMARY--Purpose and Structure of the Merger; Reasons for the Merger,"
"--Certain Effects of the Merger; Plans for the Company after the Merger,"
"SPECIAL FACTORS--Purpose and Effects of the Merger; Reasons for the Merger,"
"--Plans for the Company after the Merger," "--Certain Effects of the Merger,"
and "FINANCING OF THE MERGER" is incorporated herein by reference.
(c) The relevant information set forth under the caption "SPECIAL
FACTORS--The Merger Agreement" and in Annex A to the Preliminary Proxy Statement
is incorporated herein by reference.
(d) The relevant information set forth under the captions
"SUMMARY--Financing of the Merger," "FINANCING OF THE MERGER," and in
Exhibit (a)(1) is incorporated herein by reference.
(f) Not Applicable.
(g) The relevant information set forth under the captions "SUMMARY--Purpose
and Structure of the Merger; Reasons for the Merger," "--Certain Effects of the
Merger; Plans for the Company after the Merger," "SPECIAL FACTORS--Purpose and
Effects of the Merger; Reasons for the Merger," and "--Certain Effects of the
Merger" is incorporated herein by reference.
ITEM 6. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a) The relevant information set forth under the captions
"SUMMARY--Financing of the Merger," "FINANCING OF THE MERGER" and in Exhibit
(a)(1) is incorporated herein by reference.
(b) The relevant information set forth under the captions "SPECIAL
FACTORS--Fees and Expenses" and "FINANCING OF THE MERGER" is incorporated
herein by reference.
(c) The relevant information set forth under the captions
"SUMMARY--Financing of the Merger," "FINANCING OF THE MERGER," and in Exhibit
(a)(1) is incorporated herein by reference.
(d) Not applicable.
ITEM 7. PURPOSE(S), ALTERNATIVES, REASONS AND EFFECTS.
(a) and (c). The relevant information set forth under the captions
"QUESTIONS AND ANSWERS ABOUT THE MERGER," "SUMMARY--Background of the Merger,"
"--Purpose and Structure of the Merger; Reasons for the Merger," "SPECIAL
FACTORS--Background of the Merger," "--Fairness of the Merger," "--Position of
DIC and IDB Development Regarding Fairness of the Merger," "--Plans for the
Company after the Merger," and "--Purpose and Effects of the Merger; Reasons for
the Merger" is incorporated herein by reference.
(b) Not Applicable.
(d) The relevant information set forth under the captions "QUESTIONS AND
ANSWERS ABOUT THE MERGER," "SUMMARY--Background of the Merger," "--Purpose and
Structure of the Merger; Reasons for the
9
Merger," "--Certain Effects of the Merger; Plans for the Company after the
Merger," "--Accounting Treatment," "--Certain Federal Income Tax Consequences,"
"SPECIAL FACTORS--Background of the Merger," "--Purpose and Effects of the
Merger; Reasons for the Merger," "--Plans for the Company after the Merger,"
"--Certain Effects of the Merger," "--Accounting Treatment of the Merger," and
"--Certain U.S. Federal Income Tax Consequences of the Merger" is incorporated
herein by reference.
ITEM 8. FAIRNESS OF THE TRANSACTION.
(a) The relevant information set forth under the captions "QUESTIONS AND
ANSWERS ABOUT THE MERGER," "SPECIAL FACTORS--Recommendation of the Special
Committee and the Company Board," "--Fairness of the Merger," and "--Position of
DIC and IDB Development Regarding Fairness of the Merger" is incorporated herein
by reference.
(b) The relevant information set forth under the captions "QUESTIONS AND
ANSWERS ABOUT THE MERGER," "SUMMARY--Background of the Merger," "--Purpose and
Structure of the Merger; Reasons for the Merger," "--The Fairness Opinion of the
Financial Advisor," "SPECIAL FACTORS--Background of the Merger," "--Fairness of
the Merger," "--Position of DIC and IDB Development Regarding Fairness of the
Merger," and "--Purpose and Effects of the Merger; Reasons for the Merger" is
incorporated herein by reference.
(c) The relevant information set forth under the captions "QUESTIONS AND
ANSWERS ABOUT THE MERGER," "INTRODUCTION--General," "--Voting at the Special
Meeting and Revocation of Proxies," and "SPECIAL FACTORS--Fairness of the
Merger" is incorporated herein by reference.
(d) The relevant information set forth under the caption
"SUMMARY--Background of the Merger," "--The Fairness Opinion of the Financial
Advisor," "SPECIAL FACTORS--Background of the Merger," and "--Opinion of Merrill
Lynch" is incorporated herein by reference.
(e) The relevant information set forth under the captions "QUESTIONS AND
ANSWERS ABOUT THE MERGER," "SPECIAL FACTORS--Recommendation of the Special
Committee and the Company Board," and "--Interests of Certain Persons in the
Merger" is incorporated herein by reference.
(f) Not Applicable.
ITEM 9. REPORTS, OPINIONS, APPRAISALS AND CERTAIN NEGOTIATIONS.
(a) and (b). The relevant information set forth under the captions
"QUESTIONS AND ANSWERS ABOUT THE MERGER," "SUMMARY--Background of the
Merger," "--The Fairness Opinion of the Financial Advisor," "SPECIAL
FACTORS--Background of the Merger," "--Exchange of Company Shares between IDB
Development and DIC; Assignment of the Merger Agreement;" "--Fairness of the
Merger," "--Opinion of Merrill Lynch," "--BT Wolfensohn, Financial Advisor to
IDB Development," and in Exhibits (b)(1), (b)(2), (b)(3), (b)(4), (b)(5) and
(b)(6) to this Transaction Statement is incorporated herein by reference.
(c) The relevant information set forth under the caption "SPECIAL
FACTORS--Exchange of Company Shares between IDB Development and DIC;
Assignment of the Merger Agreement;" "--Opinion of Merrill Lynch," and "--BT
Wolfensohn, Financial Advisor to IDB Development" is incorporated herein by
reference.
ITEM 10. INTEREST IN SECURITIES OF THE ISSUER.
(a) The relevant information set forth under the captions
"INTRODUCTION--General," "SPECIAL FACTORS--Interests of Certain Persons in the
Merger," and "OWNERSHIP OF SHARES" is incorporated herein by reference.
(b) Not Applicable.
10
ITEM 11. CONTRACTS, ARRANGEMENTS OR UNDERSTANDINGS WITH RESPECT TO THE
ISSUER'S SECURITIES.
The relevant information set forth under the captions "QUESTIONS AND
ANSWERS ABOUT THE MERGER," "SUMMARY--Parties to the Merger Agreement,"
"--Background of the Merger," "--Purpose and Structure of the Merger; Reasons
for the Merger," "--Effective Time for the Merger," "--Appraisal Rights,"
"--The Fairness Opinion of the Financial Advisor," "--Conditions to the
Merger," "--Termination of the Merger Agreement," "--Amending or Waiving
Terms of the Merger Agreement," "SPECIAL FACTORS--Background of the Merger,"
""--Exchange of Company Shares between IDB Development and DIC; Assignment of
the Merger Agreement," "--Interests of Certain Persons in the Merger," "--The
Merger Agreement," and in Annex A to the Preliminary Proxy Statement is
incorporated herein by reference.
ITEM 12. PRESENT INTENTION AND RECOMMENDATION OF CERTAIN PERSONS WITH
REGARD TO THE TRANSACTION.
(a) Not Applicable.
(b) The relevant information set forth under the captions
"INTRODUCTION--General," "--Voting at the Special Meeting and Revocation of
Proxies," "SPECIAL FACTORS--Recommendation of the Special Committee and the
Company Board," "--Fairness of the Merger," "--Position of DIC and IDB
Development Regarding Fairness of the Merger," "--The Merger Agreement," and
in Annex A to the Preliminary Proxy Statement is incorporated herein by
reference.
ITEM 13. OTHER PROVISIONS OF THE TRANSACTION.
(a) The relevant information set forth under the captions "QUESTIONS AND
ANSWERS ABOUT THE MERGER," "SUMMARY--Appraisal Rights," "SPECIAL FACTORS--The
Merger Agreement," "--The Rights of Dissenting Shareholders," and in Annex B to
the Preliminary Proxy Statement is incorporated herein by reference.
(b) and (c). Not Applicable.
ITEM 14. FINANCIAL INFORMATION.
(a) The relevant information set forth under the captions
"SUMMARY--Selected Summary Financial Information Concerning the Company,"
"SELECTED FINANCIAL INFORMATION OF THE COMPANY," "INCORPORATION OF CERTAIN
DOCUMENTS BY REFERENCE," and in Exhibits (g)(1) and (g)(2) to this
Transaction Statement is incorporated herein by reference. Pursuant to
Instruction D and Instruction F to Schedule 13E-3, the following are
incorporated by reference:
(i) The "Consolidated Financial Statements" from the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 1997 (copies of
which are filed as Exhibit (g)(1) to this Transaction Statement); and
(ii) The "Consolidated Financial Statements" from the Company's
quarterly report on Form 10-Q for the period ended September 30, 1998
(copies of which are filed as Exhibit (g)(2) to this Transaction
Statement).
(b) Not Applicable.
11
ITEM 15. PERSONS AND ASSETS EMPLOYED, RETAINED OR UTILIZED.
(a) The relevant information set forth under the captions
"INTRODUCTION--Voting at the Special Meeting and Revocation of Proxies,"
"SPECIAL FACTORS--Plans for the Company after the Merger," "--The Merger
Agreement," "FINANCING OF THE MERGER," and in Annex A to the Preliminary Proxy
Statement is incorporated herein by reference.
(b) The relevant information set forth under the captions
"SUMMARY--Background of the Merger," "--The Fairness Opinion of the Financial
Advisor," "SPECIAL FACTORS--Background of the Merger," "--Opinion of Merrill
Lynch," and "--Fees and Expenses" is incorporated herein by reference.
ITEM 16. ADDITIONAL INFORMATION.
The information set forth in the Preliminary Proxy Statement is
incorporated herein by reference in its entirety.
ITEM 17. MATERIAL TO BE FILED AS EXHIBITS.
EXHIBIT NUMBER DESCRIPTION
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(a)(1) --Form of Loan Agreement dated March __, 1999 between Bank
Hapoalim B.M. and PEC Acquisition Corporation.
(b)(1) --Fairness Opinion of Merill Lynch International
(incorporated by reference to Annex C to the Preliminary
Proxy Statement).
(b)(2) --Presentation materials regarding Project Alpha provided to
the Special Committee of the Board of Directors of the
Company by Merrill Lynch International dated December
11, 1998.
(b)(3) --Fairness Opinion of A.O. Adav Financial Consultants Ltd.
dated December 15, 1998.
(b)(4) --Presentation materials regarding Project Alpha provided to
the Board of Directors by BT Wolfensohn dated December 15,
1998.
(b)(5) --Valuation of the Number of Shares of Discount Investment
Corporation which will be issued to IDB Development
Corporation Ltd. in consideration for 14,937,792 Shares of
$1 par value of PEC - Israel Economic Corporation by Itzhak
Swary Ltd. dated October 15, 1998.
(b)(6) --Fairness Opinions of GIZA Economic Consulting and Financial
Management (1988) Ltd. dated October 15, 1998 and December 15,
1998.
(c) --Agreement and Plan of Merger dated as of December 15,
1998 among Discount Investment Corporation Ltd., PEC
Acquisition Corporation, and PEC Israel Economic
Corporation (incorporated by reference to Annex A to the
Preliminary Proxy Statement).
(d) --The Preliminary Proxy Statement (incorporated by reference
to the Preliminary Proxy Statement).
(e) --Dissenters' Rights (incorporated by reference to Annex B to
the Preliminary Proxy Statement).
(f) --Not applicable
(g)(1) --Consolidated Financial Statements (incorporated by
reference from the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 1997).
(g)(2) --Consolidated Financial Statements (incorporated by
reference from the Company's Quarterly Report on
Form 10-Q for the period ended September 30, 1998).
12
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this Transaction Statement is true, complete
and correct.
DISCOUNT INVESTMENT CORPORATION LTD.
By: /s/ Dov Tadmor
--------------------------------
Title: Managing Director
By: /s/ Yoram Turbowicz
--------------------------------
Title: Deputy Managing Director
Date: March 12, 1999
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this Transaction Statement is true, complete
and correct.
PEC ACQUISITION CORPORATION
By: /s/ Dov Tadmor
--------------------------------
Title: Chairman of the Board
Date: March 12, 1999
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this Transaction Statement is true, complete
and correct.
PEC ISRAEL ECONOMIC CORPORATION
By: /s/ Frank Klein
--------------------------------
Title: President
Date: March 12, 1999
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this Transaction Statement is true, complete
and correct.
IDB DEVELOPMENT CORPORATION LTD.
By: /s/ Eliau Cohen
--------------------------------
Title: Co-Chief Executive
Officer
By: /s/ Arthur Caplan
--------------------------------
Title: Corporate Secretary
Date: March 12, 1999
13
EXHIBIT NUMBER DESCRIPTION
-------------- -----------
(a)(1) --Form of Loan Agreement dated March __, 1999 between Bank
Hapoalim B.M. and PEC Acquisition Corporation.
(b)(1) --Fairness Opinion of Merill Lynch International
(incorporated by reference to Annex C to the Preliminary
Proxy Statement).
(b)(2) --Presentation materials regarding Project Alpha provided to
the Special Committee of the Board of Directors of the
Company by Merrill Lynch International dated December
11, 1998.
(b)(3) --Fairness Opinion of A.O. Adav Financial Consultants Ltd.
dated December 15, 1998.
(b)(4) --Presentation materials regarding Project Alpha provided to
the Board of Directors by BT Wolfensohn dated December 15,
1998.
(b)(5) --Valuation of the Number of Shares of Discount Investment
Corporation which will be issued to IDB Development
Corporation Ltd. in consideration for 14,937,792 Shares of
$1 par value of PEC - Israel Economic Corporation by Itzhak
Swary Ltd. dated October 15, 1998.
(b)(6) --Fairness Opinions of GIZA Economic Consulting and Financial
Management (1988) Ltd. dated October 15, 1998 and December 15,
1998.
(c) --Agreement and Plan of Merger dated as of December 15,
1998 among DIC Investment Corporation Ltd., PEC
Acquisition Corporation, and PEC Israel Economic
Corporation (incorporated by reference to Annex A to the
Preliminary Proxy Statement).
(d) --The Preliminary Proxy Statement (incorporated by reference
to the Preliminary Proxy Statement).
(e) --Dissenters' Rights (incorporated by reference
to Annex B to the Preliminary Proxy Statement).
(f) --Not applicable
(g)(1) --Consolidated Financial Statements (incorporated by
reference from the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 1997).
(g)(2) --Consolidated Financial Statements" (incorporated by
reference from the Company's Quarterly Report on Form 10-Q
for the period ended September 30, 1998).
14