The family of the late Aharon Shaked, one of the founders of Israeli online gambling company 888 Holding plc (LSE:888), has sold a large proportion of their chips for cash, one year after the family of Ben-Yitzhak did the same thing. The two sales are related.
At the beginning of this month, the 888 share reached an all-time high of £3, and is now at £2.82, following the sell-off by the Shaked heirs. The share was priced at £1.75 in the company's IPO (not including dividends), reflecting a 60% return on the price in the offering.
Two families founded 888: Shay and Ron Ben-Yitzhak, who brought the technological expertise; and brothers Avi and Aharon Shaked, who had deep pockets and business experience. As a result, the Ben-Yitzhak family had a 23% stake at the time of the IPO, and the Shaked family owned 34% of the capital. During the almost 12 years since then, the Ben-Yitzhak family sold its shares in stages, virtually liquidating its holdings in the company a year ago. The family thereby accumulated NIS 1 billion, including gross pre-tax dividends. Aharon Shaked died in early 2010, leaving his assets to his widow, Haya, and his two children: his son, Ohad, and his daughter, Tal.
In contrast to the Ben-Yitzhak family, the Shaked family did not sell a single 888 share, until last week, when the heirs sold 40 million shares at £2.70 a share, garnering £108 million ($140 million, NIS 500 million). The Shaked family thereby sold half of its holdings in 888, leaving it with a 12.9% stake. The Avi Shaked branch of the family owns 24.1%.
The surge in the share price is not the sole reason for the sale. Shay Ben-Yitzhak was always closer to Aharon Shaked, but he never got along with Avi Shaked. When Aharon died, his children took command of the family wealth, and the rift between Shay Ben-Yitzhak and Avi Shaked widened. The fact that Aharon's heirs did not get along with Avi Shaked, either, was also unhelpful. A strong indication of the lack of harmony prevailing between the four factions was the failure of the negotiations to sell the company to UK competitor William Hill in February 2014. The partial sale by Aharon Shaked's heirs is strong evidence of the differences of opinion between the two branches of the Shaked family.
Not much is known about Aharon Shaked's two children. The entire family keeps its distance from the media, managing its wealth like a family office. Among other things, the company is investing in clean-tech ventures through Shaked Global, its investment group.
Published by Globes [online], Israel Business News - www.globes-online.com - on June 4, 2017
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