Infrastructure and real estate development company Shikun & Binui (TASE: SKBN) has just announced that Amit Birman has been appointed acting CEO of the group. Until the appointment, Birman was deputy CEO and CFO at the company.
Last week, it was announced that Shikun & Binui CEO Tamir Cohen had resigned amid a power struggle with controlling shareholder Netanel (Naty) Saidoff. Cohen plans to put together an investor group that will attempt to wrest control of Shikun & Binui from Saidoff.
The resignation came after, a week previously, Saidoff appointed himself a director at the company, which was viewed as a first step towards becoming chairperson, in order to be in a position to intervene in the day to day running of the company and acquire greater influence.
In his letter of resignation, Cohen wrote that he had decided to leave, "After six years of activity, in which we immeasurably improved the company's financial situation, promoted many projects, and acquired significant activities for the company."
He added, "Recently special circumstances have arisen in which I have the impression that I have the ability, together with other investors, to purchase some or all of the controlling shares in the company, which I believe can grow significantly. At the same time, the fact that the controlling shareholder has decided to be more involved in the management of the company led me to the conclusion that it would be right and appropriate at this stage for me to move forward on this, while I am out of the company."
Shikun & Binui's share price has fallen 65% from its peak price in May 2021. The company has taken on debt for diverse projects, including the purchase of a huge plot in Tel Aviv's Sde Dov site for the construction of long-term rental housing.
In June 2018, Saidoff bought 47% of Shikun & Binui from Shari Arison for NIS 1.1 billion, which reflected a 15% discount on the market price at the time.
It was bargain price, with the stock trading at a low on which Arison gave a discount because of her desire to exit the company that had become embroiled in allegations of bribery of public officials in Africa and misreporting of the sums involved. The company reached a settlement with the authorities over the affair only last week.
Saidoff believed that the company had hidden value, and it quickly became apparent that he had made the deal of his life. Even he did not expect the fantastic return on his investment in Shikun & Binui in the first few years after he bought his stake, which rose in value to over NIS 4 billion. Saidoff did not however sell his shares, and now he must surely be regretting that. The theoretical value of his stake (which has been diluted to 41%) has now shrunk to just NIS 300 million.
Saidoff has sharply criticized the decision to participate in the Sde Dov tender. The performance of the stock, which has kept falling because of the huge leverage that has strangled the company in the past two years because of the rise in interest rates, is one of the factors that led Saidoff to push for change and to edge Cohen out of the company.
Published by Globes, Israel business news - en.globes.co.il - on July 7, 2024.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2024.