Less than a week after selling a substantial portion of its holding in Alrov Properties and Lodgings (TASE: ALRPR), Israel Canada (TASE: ISCN), controlled by Barak Rosen and Asaf Touchmair has liquidated most of its remaining position in the income producing real estate company controlled by Alfred Akirov, at a lower profit than expected.
Israel Canada reported yesterday that it had sold to Alrov 9% of the shares in it for NIS 285 million, and a further small stake to More Investment House for NIS 23 million. More was the purchaser of the 4% stake in Alrov that Israel Canada sold last week.
Rosen and Touchmair have thus completed the sale of most of their company’s stake in Alrov for NIS 458 million within a week, and are left with just 1%, worth some NIS 50 million. Although Israel Canada sold the shares in Alrov at a deep discount of 20% on the market price, the investment still yielded a profit of about NIS 60 million. But since Israel Canada posted a profit of some NIS 150 million on its investment in the past, on the basis of the market price of Alrov shares, it will write down the investment by more than half of that profit.
The shares that Alrov has bought from Israel Canada will become dormant, reducing the float. As a result, Akirov’s stake in Alrov will grow to 86%, while More Investment House will become the largest shareholder from the public, with 6%.
Alrov has given Israel Canada an undertaking that if within the next 24 months it becomes a private company, for example through an offer to purchase, a merger, or a share buyback, and the share price in the transaction is more than NIS 142.50 (the share price in the current deal). Alrov will pay Israel Canada an additional consideration of 10% of the price at which the public’s shares are bought. Akirov is likely to want to turn Alrov into a privately-held company in order to be able to obtain a permit to control Clal Insurance.
Israel Canada’s share price fell by 5.41% yesterday, and is down a further 2.76% this morning.
Published by Globes, Israel business news - en.globes.co.il - on January 23, 2023.
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