Elron Electronic (ELRN) to Negotiate with Clal Industries and DIC Related to Elron's 15% Interest in NetVision

July 6, 2009 8:59 AM EDT

Elron Electronic Industries Ltd. (NASDAQ: ELRN) today announced that further to its announcement on May 20, 2009, Elron intends to negotiate with Clal Industries and Investments Ltd. and Discount Investment Corporation Ltd. regarding a transaction whereby Clal and DIC will acquire from Elron, its approximately 15% interest in NetVision Ltd., a provider of communication services in Israel. The price of Elron's interest in Netvision will be determined by negotiation between the parties based on an appraisal of such interest to be prepared, and for that purpose, an independent appraiser was today jointly appointed by the parties. In addition, Elron intends to engage an independent expert to express an opinion as to the fairness for Elron of the price to be determined.

DIC currently holds approximately 49% of Elron's outstanding ordinary shares. DIC and Clal are both majority owned subsidiaries of IDB Development Ltd. DIC and Clal currently hold approximately 31% and 24%, respectively, of Netvision's outstanding ordinary shares. Elron, DIC and Clal are parties to a shareholders agreement in connection with their respective holdings of Netvision shares.

The transaction is subject to the parties reaching and entering into a definitive agreement as well as obtaining applicable corporate and regulatory approvals and there is no assurance of the occurrence, timing or terms of such transaction.

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