Eli Azur wins Tamar board battle after NeoGames exit

Eli Azur credit: Tali Bogdanovsky
Eli Azur credit: Tali Bogdanovsky

The Israeli businessman had a busy week as he completed the sale of NeoGames for $1.2 billion and saw off Aaaron Frenkel's efforts to put his candidates on Tamar Petroleum's board.

Israeli businessman Eli Azur was busy last week succeeding in the vote on the composition of the board of directors of Tamar Petroleum (TASE: TMRP). On Wall Street, Azur and his partners completed the sale of online gambling company NeoGames (Nasdaq: NGMS) to Australian gaming and betting company Aristocrat Leisure (ASX: ALL) for $1.2 billion in full dilution. Aristocrat paid $29.50 per share, a 130% premium when the deal was first reported in May 2023.

NeoGames, which is incorporated in Luxembourg, and operates out of Ramat Hahayal in Tel Aviv, provides technological solutions and services to government lottery companies, and assists them in moving their activities online. At the same time its Aspire subsidiary, which merged into NeoGames in 2022, is engaged in iGaming solution and systems and services for Internet sports gambling and casino websites.

This is Aristocrat's second acquisition in Israel after buying Herzliya-based Plarium for $700 million from shareholders like Gigi Levy-Weiss and Yitzchak Mirilashvili (owner of Channel 14).

Zahavi ceased being a party-at-interest in 2023

Azur is one of the main beneficiaries of the completion of NeoGames's sale with a 17.5% stake worth $178 million. Others benefitting from the exit in the Israeli company include Barak Matalon, a company director and cofounder of Aspire, and Rony Aran, also a director. Matalon held a 28.1% stake in NeoGames worth $285 million and Aran held a 7% stake worth $71.2 million. NeoGames CEO Moti Malul held a 1.4% stake worth $14 million.

Another veteran investor in NeoGames was renowned soccer agent Pini Zahavi, Azur's business partner in many ventures. He ceased being a party-at-interest in the company in 2023 when his stake fell to 4.99% after selling shares to his partners - Matalon, Azur and Aran. The sale price of Zahavi's shares was based on a mechanism linked to the average price on Nasdaq at the time. Assuming that he remained with a holding of 4.99% and did not sell the shares in the period since then, Zahavi received close to $50 million in the sale to Aristocrat.

An independent unit within Aristocrat

NeoGames floated on Nasdaq at the end of 2020, at a time when Wall Street welcomed tech company IPOs with open arms. The IPO valuation was $419 million and in the flotation Azur and Zahavi each sold shares for several million dollars. Anybody who bought shares during the IPO would have seen returns of 73% on the sale to Aristocrat.

NeoGames was founded in 2014 as a spinoff from Aspire Global, which had been floated several years earlier on the Swedish Stock Exchange.

Both Azur and Zahavi had sold shares during the IPO. In 2022 NeoGames and Aspire merged when NeoGames filed an offer for purchase for Aspire at a company valuation of $480 million.

At the end of 2023, NeoGames had 700 employees including 221 employees in Israel. Last year the company's revenue grew 15.6% to $192 million and GAAP net loss narrowed by 4% to $18.3 million. Aristocrat reported to the ASX that after the acquisition NeoGames would be managed as an independent unit led by Malul, who will also join the management of the Australian company.

Tamar Petroleum shares for NIS 500 million

In addition to his gaming interests, Azur also owns the Israeli Maariv and Jerusalem Post daily newspapers, the Walla! News website and regional radio stations. Together with Zahavi he owns the Charlton TV sports channels.

Alongside all this one of Azur's successful investments in recent years has been the purchase of shares in Tamar Petroleum, here he holds a 25% stake. Three years ago Azur bought a 22.6% stake in the company, which is one of the partners in the Tamar offshore gas field, for NIS 100 million from Delek unit NewMed Energy (TASE: NWMD) and since then he has increased his stake. He currently owns shares worth nearly NIS 500 million, a return of more than 300% on his investment.

At the end of last week, Azur achieved a victory over Aaron Frenkel, another major shareholder in Tamar Petroleum, after a majority of the company's shareholders voted that the company's board of directors would retain in its current composition.

Frenkel, who in recent years has completed particularly successful rounds of investments in shares traded on the Tel Aviv Stock Exchange (first Aeronautics and later Bayside), failed in his attempt to get his representatives onto the Tamar Petroleum board of directors, and at the same time the shareholders elected Eva Madjiboj-Levy as a new independent director, who is seen as close to Azur..

Tamar Petroleum is a company without core, which holds 16.75% of the rights in the Tamar natural gas reservoir. The chairman of the company is Roni Bar-On, the former Minister of Finance, and the CEO is Barak Mashraki. Frenkel and Azur are two biggest shareholders with 24.6% and 24.99% respectively. Menora insurance group owns 12.45% of the shares (through its provident funds), and businessman Moti Ben Moshe owns 6.8%. The company's share price has risen 130% in the last year and is traded at a market cap of about NIS 2 billion.

Market sources believe that the attractiveness of the stock has increased due to the growing demand for natural gas, as shown in the company's reports for 2023 with a net profit of $50 million, up 46% from 2022 (despite the shutdown of the reservoir for more than a month at the beginning of the war). According to Tamar Petroleum's bylaws, the company is solely engaged in the holding of natural gas production from the reservoir, and is obligated to distribute dividends.

During the vote for the board, a new shareholder in Tamar Petroleum was revealed - a Hungarian investment fund called Repro I Capital, which according to estimates owns 3% of the shares.

Published by Globes, Israel business news - en.globes.co.il - on May 2, 2024.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2024.

Eli Azur credit: Tali Bogdanovsky
Eli Azur credit: Tali Bogdanovsky
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