In this situation, the bank would like covenants. These covenants are certain conditions in the loan agreement guaranteeing the loan funds will be returned to the bank at the end of the process. The purpose behind the conditions is to keep the buyer so that he could return the money loaned from the bank.

These are actually financial standards that include some limitations, such as maintaining the the amount of personal capital. Once the purchaser does not meet the conditions, the loan will be immediately due and payable.

Eitan Eldar emphasizes that the bank and the buyer are not related to the company. The entity that has a relationship with the bank is the only buyer. The company can continue its current operations as usual.

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1. Interest in turning the company into private – Eitan Eldar tells that here, the controlling shareholder of a company removes it from the public market. He submits a tender offer which is higher than its market price. When the other shareholders are considered 95 percent of a company and agree to the offer, he can oblige the remaining shareholders to sell their shares as a part of this offer.
2. No controlling block in the company – Another scrnario, as points out Eitan Eldar, happens when there isn’t any controlling block. In order to get more than 25 percent of the company, a tender offer is needed for 5 percent, in order to achieve 30 percent. Then, it is possible to purchase up to 44.9 percent, and again perform a tender offer for 5 percent – to get 50 percent.

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