Israeli businessman Amnon Barzilay is in talks to buy Ofer Mall Malkat Sheba from Melisron Ltd. (TASE: MLSR) for NIS 170 million, sources inform "Globes."
Barzilay, who as far as is known made most of his wealth in real estate and hotels in the Netherlands and other foreign countries, has featured prominently in capital market stories over the past decade after acquiring half of the controlling interest in Gmul Investment Company, and later in Metis Capital, which held Japanauto, holder of the Subaru franchise for Israel. These two investments generated losses, bank debts, and a criminal conviction.
The 3,300-square meter Ofer Mall Malkat Sheba, located in the middle of Eilat's northern beach promenade, contains clothing, footwear, jewelry, gift, and other stores. The mall is one of the smaller properties belonging to Liora Ofer-controlled Melisron, which is managed by CEO Avi Levy. Melisron's market cap is NIS 7.2 billion. Melisron told "Globes" in response, "The company judges every offer on its merits."
Barzilay escaped from his previous involvement in public companies in Israel by the skin of his teeth. After several years of unsuccessful investments and disputes with his partners, Barzilay sold his share in Metis Capital to his then-partner, Shimon ("Moni") Harel, in 2010 for less than NIS 1 million, with a large debt to Mizrahi Tefahot Bank (TASE:MZTF), which financed Barzilay and Harel's investment in the company, after Barzilay parted company with Eyal Yona, his partner in Gmul.
A few months after the joint deal was completed, a dispute emerged between Barzilay and his new partner, which degenerated into grave mutual accusations in the media and counter lawsuits. The decline in Metis's business forced the two partners to sell its assets, mostly notably half of the shares in Japanauto, to partner Gad Zeevi (Metis later collapsed under Harel's control).
In 2013, the Tel Aviv District Court convicted Barzilay, sentenced him to six months of community service, and fined him NIS 1.8 million, after he confessed in a plea bargain to aggravated fraud, fraud, breach of corporate trust, including a misleading item in a prospectus, and including a misleading item in reports with the intent of misleading an investor.
The indictment stated that in late 2005, as one of the owners of Japanauto, Barzilay contacted Trade Mobile, which provides auto trade-in services, in order to discuss possible cooperation between Trade Mobile and Japanauto. According to the State Attorney's Office, Barzilay made cooperation between the companies contingent on Trade Mobile paying him half of the profits to be produced from the joint activity as remuneration for his mediation. It was also alleged that after Trade Mobile's owners complied with Barzilay's demand, he took steps to bring about an agreement between Japanauto and Trade Mobile, while concealing his personal interest in the deal from both the CEO of Japanauto and the company's board of directors.
Published by Globes, Israel business news - en.globes.co.il - on November 20, 2018
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