Gazit Globe, controlled by founder and chairman Chaim Katzman, today reported that it had reached agreement for the acquisition of the 40% minority stake in its subsidiary, Atrium, for €565 million (NIS 2.26 billion).
Gazit Globe's share price is currently up by more than 10% on the Tel Aviv Stock Exchange.
The price in the agreement, which will be brought before the minority shareholders in Atrium for approval, constitutes an 18% premium on Atrium's closing share price yesterday in Europe and a 13% premium on the average share price in the past 90 days. Gazit Globe also said that Menorah Mivtachim was joining the deal as a partner, and would acquire 12% of Atrium's shares after the acquisition was completed for €150 million, the same price at which Gazit Globe bought the shares.
Before the deal is completed, Atrium will distribute a dividend of €0.60 per share, reducing the actual payment for the acquisition to €475 million (NIS 1.9 million). Completion of the deal is scheduled for January 2020.
Gazit Globe is taking advantage of the commercial environment in Europe to increase its stake in Atrium as a price 20% lower than Atrium's book value. At the price in the deal, Gazit Globe will increase the cash flow in the group by NIS 85 million, a 15% increase per share.
Gazit Globe has been the controlling shareholder in Atrium since 2008. Atrium has since sold more than 120 properties, abandoning its business in Hungary, Latvia, and Romania. Atrium's current portfolio consists of 34 properties with an aggregate value of €3 billion. Over 85% of the properties are in Poland and the Czech Republic, and 50% of them are in Warsaw and Prague.
"Atrium has a portfolio of dominant high-quality properties and an excellent experienced managerial backbone. Gazit Globe acquired control of Atrium 11 years ago, and is thoroughly familiar with the company, its properties, and its potential. Direct ownership of assets such as Atrium is consistent with the Gazit Globe group's strategy of being the direct owner of properties in densely populated urban regions with future growth potential and multiple uses. We are delighted to add Menorah Mivtachim as an investment partner in Atrium, and are confident that cooperation is for the benefit of all those involved," Katzman said.
"As part of our policy of spreading and diversifying our customers' investment portfolio, we have joined Gazit Globe, a leading concern with great experience in the field, as partners. This investment is part of the strategy of finding investment opportunities for the group's customers in order to maximize returns," Menorah Mivtahim executive vice-CEO and chief investment officer Nir Moroz said.
Published by Globes, Israel business news - en.globes.co.il - on July 23, 2019
© Copyright of Globes Publisher Itonut (1983) Ltd. 2019