The Azrieli Foundation is selling a chunk of its shares in Azrieli Group Ltd. (TASE: AZRG), amounting to 5% of the group's capital, for a total of NIS 900 million.
The sale process, which began yesterday and is continuing today, reflects a discount of a few percent on the market price before the process began, leading to a drop of over 4% in the Azrieli share price on Tuesday, although the shares recovered with a small 0.13% rise yesterday. This reflects a market cap of nearly NIS 18 billion for the share, the ninth highest on the Tel Aviv Stock Exchange (TASE). The Azrieli Group explained that the sales process had taken place "as part of the preparations for the reform in the indices recently announced by the TASE."
This reform requires public holdings of at least 30% from the companies slated for inclusion in the new leading index on the TASE, while the public's current holdings in Azrieli Group stand at 25%.
The index reform being promoted by TASE management in the hope of increasing the TASE's attractiveness and encouraging trading on it was approved by the TASE board in recent weeks, and is at the key and essential stage of obtaining approval from the Israel Securities Authority. Among other things, the Tel Aviv 25 Index will be expanded to include the shares of the 35 largest companies on the TASE.
Following the sale of its shares, the Azrieli Foundation, which operates as a public foundation founded by the late David Azrieli for philanthropic purposes, is left with an 8.5% stake in the group.
In addition to the selling of its shares, the Azrieli Group is raising a private NIS 250 million loan , which it expects to use for its current needs, and has obtained an AA plus rating from S&P Maalot for this purpose.
After raising NIS 2.2 billion in a bond issue on the TASE in 2015, the Azrieli Group is planning another bond issue this year amounting to NIS 1.3 billion.
Azrieli Group, managed by CEO Yuval Bronstein, last week published its 2015 results, showing a 4% drop in net profit to NIS 828 million. Excluding the expenses of subsidiary Granite Hacarmel, whose business is being sold, the group's annual profits grew 26% to NIS 906 million.
Following its positive results, Azrieli Group announced the distribution of a NIS 400 million dividend to its shareholders.
Azrieli Group has recently emphasized its protected housing business, and last week signed a contingent agreement to acquire a fifth property in this segment the Ahuzat Bayit housing project in Ra'anana from the family of Yochi Schneider for NIS 55 million.
Published by Globes [online], Israel business news - www.globes-online.com - on March 31, 2016
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