The merger will create one of the largest residential property developers in Israel with a land bank for approximately 7,000 housing units of which 1,600 are already under construction.

DRE will transfer all of its shares in Dankner Investments Ltd. ("DI"), a fully owned subsidiary of DRE, to Kardan RE. DRE will receive 40% of the shares of Kardan RE. Following the transaction, Kardan RE will be jointly held by Kardan Israel (60%) and DRE (40%). Kardan NV holds approximately 71.35% of Kardan Israel which in turn holds 100% of Kardan RE and following the transaction will hold 60% of Kardan RE.

The final agreement and the closing of the transaction are subject to certain conditions precedent, including antitrust and tax authority approvals.

Kardan Israel has granted DRE a put option to sell its shares to Kardan Israel in case there has not been an IPO of the merged entity following the fourth anniversary of the closing. The consideration for this sale will be determined by an appraiser but will not be less than USD 67.5 million. The put option can be exercised during a period of 90 days, following the 4th anniversary of the closing (and in certain circumstances the exercise period can be postponed by Kardan RE for an additional year).

DI is a private company specializing in development, planning and building of residential real estate projects in Israel. Its activities are conducted directly or via joint ventures with third parties.

Kardan RE and DI are both active in acquiring land banks for residential development and marketing these projects. Combining the activities will lead to one of the four largest real estate companies in the residential sector in Israel. During 2007 Kardan RE and Dankner sold together approximately 718 housing units.

About Kardan

Kardan is an international investment company based in Amsterdam with a focus on three sectors: Real Estate, Financial Services and Infrastructure. The company is primarily active in emerging markets in Central and Eastern Europe and China, where it conducts most of its activities.

Kardan holds controlling interests in its main businesses and is actively involved in the definition and implementation of their strategy. Kardan has a consistent track record of creating long-term shareholder value through active management of investments in the group companies and by leveraging on its business experience, financial resources and local and international network.

Total assets per December 31, 2006 amounted to EUR 2.2 billion, with revenues of EUR 588 million. The number of employees engaged by the group is approximately 7,980 as of December 31, 2006. Kardan is listed on Euronext Amsterdam and the Tel-Aviv Stock Exchange.

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