FIMI Opportunity Funds, controlled by Ishay Davidi, is negotiating a substantial exit. Five years after investing in geothermal energy company Ormat Technologies Inc. (NYSE: ORA; TASE: ORA), the firm is in talks on the sale of its holding for $60 per share. Ormat Technologies' closed in New York yesterday at $56.77, giving it a market cap of $2.82 billion.
FIMI holds 14% of Ormat Technologies, while the Bronicki family owns 7%.
What does Davidi know that other investment managers don't? He has been selling off FIMI's investment portfolio. In the past six months, FIMI has sold three of its most important holdings. It started with the flotation of container and logistics company Overseas Commerce, continued with the flotation of drug distribution company Novolog, and now the fund is looking to sell its holding in Ormat.
In the Overseas and Novolog flotations, FIMI retained a stake, signaling to investors that it was still participating in control of the company, while making its investment liquid, with the intention of realizing it in full within a fairly short time. A senior investment manager told "Globes" this morning that this was a known method, designed to make possible an initial exit at high prices (because investors believe in FIMI and its management philosophy). The flotation is followed up by a few smaller sales of shares until the fund investors' original investment is paid back with the addition of a reasonable profit and the bonus of a remaining stake.
"Had FIMI sold its entire stakes in Overseas and Novolog, it would have met with substantially lower prices than it received, and so Davidi's exit tactic is an excellent one and popular, maximizing the exit price for his investors."
Following the Overseas Commerce flotation, FIMI holds 26% of the shares in the company, while it holds 15% of Novolog in two different funds.
Meanwhile, Ormat Technologies has released the following statement: "The company has been informed by FIMI Opportunity Funds and Bronicki Investments Ltd. (collectively, the “interested shareholders”) that they have been approached by a leading strategic investor regarding such investor’s potential interest in acquiring the common stock held by the interested shareholders. The interested shareholders have advised the company that they will inform the company as and when things progress (if at all). In any event, the company clarifies that there are no discussions for the sale of the company or its business."
Published by Globes [online], Israel business news - www.globes-online.com - on February 28, 2017
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