Has the deal for the sale of income producing real estate company G City (TASE: GCT) (formerly Gazit Globe), signed just a month ago, run aground? At the end of last week, lawyers acting for Chaim Katzman, who controls G City, wrote to Tzachi Abu, who seeks to buy the company together with two partners - Yaron Adiv and Kidan Dahari - demanding disclosure of the details of the agreement signed two weeks ago between Abu’s Ari Real Estate (TASE: ARIN) and Ispro (TASE: ISPR), controlled by Adiv and Dahari, on joint control of G City.
Under that agreement, a limited partnership will be formed held 50% by each side to buy 26% of G City from Chaim Katzman’s Norstar Holdings (TASE: NSTR) at a valuation of NIS 2.55 billion. In addition, the partnership between Ari Real Estate and Ispro will receive an option to buy an additional 7% of G City from Norstar Holdings, which will bring its stake to 33%, while that of Norstar Holdings will fall to 21% (from 54% today).
As far as is known, Abu made the deal conditional in the first place on an injection of capital of NIS 1 billion to G City and an option that would enable him to attain full control of the company. Both of these conditions were included in the agreement between Ari Real Estate and Katzman’s Norstar Holdings.
Abu isn’t Barak Rosen
A source familiar with the deal told "Globes": "If Katzman thought that Abu was Barak Rosen, he made a big mistake. Someone has come along now who has succeeded in cracking the nut." The source was referring to the unsuccessful attempt by Barak Rosen and Asaf Touchmair’s Israel Canada to take over G City a few years ago.
Katzman, people close to Abu believe, didn’t think that the latter would actually exercise his option to acquire control of G City, because it would mean consolidating the financial statements of G City, which itself has debt of NIS 9 billion and debt of NIS 24 billion together with its subsidiaries, with those of Ari Real Estate. Coopting Dahari and Adiv to the acquisition will enable Abu and his partners to take over G City without having to consolidate its financial statements. No response has been forthcoming from G City.
Katzman versus the buyers
Abu’s Ari Real Estate, whose share price has fallen by about 25% since the deal was announced (it has a current market cap of NIS 2.1 billion), has apparently made clear to Katzman that it intends to exercise the option in the agreement and acquire control. Sources familiar with the matter say that as soon as Katzman realized that this was the aim, he started to take what look like hostile measures against those who are supposed to be his future partners.
The main one, last week, was the convening of a shareholders meeting to approve bringing forward the appointment of Keren Kalifa, considered his righthand person, to the post of CEO of G City from February 2027 to October this year. Kalifa will be entitled to an annual salary of NIS 4.4 million and a generous golden parachute - two years’ salary - should she be dismissed following a transfer of control in the company.
Other steps taken by Katzman recently are the issue of a new NIS 260 million bond series, even though G City already has more than NIS 1 billion cash (and is expected to receive a NIS 1 billion capital injection), and an allocation of shares to his son-in-law Zvi Gordon.
As far as investors are concerned, it seems that they want the deal to be completed. On the day the deal was announced at the beginning of July, G City’s share price shot up by over 20%. Today, following the reports of the difficulties with the deal, the company’s share price is falling, and it has in fact has lost all the gains it made since the deal was first reported. It would appear that the market believes that the buyer group can succeed in reducing G City’s leverage, currently at 75%.
Two weeks ago, Kadin Dahari told "Globes" that one of his and his partners’ main goals was to reduce G City’s leverage. "For many years, the company has focused on financial moves and organizational structure. We want to restore it to being a leading real estate company. As soon as we take over the reins, we’ll dramatically reduce expenses and the leverage.
"We want to stabilize the company from the management point of view, with Tzachi and me running it day to day, and being hands on with the assets. And of course, at the same time, we’ll act to sell overseas assets," Dahari declared in that conversation.
It should be mentioned that if approval of the deal by the Competition Authority is delayed beyond the period stipulated in the agreement, Katzman will have the right to withdraw after three months. Because of that, Ari Real Estate rushed to submit all the materials required by the Competition Authority at the beginning of the week.
Ari Real Estate said in a statement to "Globes": "The company has stood by every agreement signed with it in the past and the present, and so it will be in the future as well. The decision to bring in Ispro as a partner to the move was made subject to the conditions of the agreement, and together they intend to reach control in the future, in order to carry out all the measures necessary to enhance G City and to generate value for all its shareholders, precisely as they declared at the time that the agreement was signed."
Published by Globes, Israel business news - en.globes.co.il - on August 3, 2026.
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