Income-producing real estate holdings company Gazit-Globe Ltd. (NYSE: GZT; TASE: GLOB) is changing direction as far as the use of its large cash balances is concerned. After failing in its attempt to buy out the minority holdings in its Atrium subsidiary, which operates in Eastern Europe, Gazit Globe now seeks to use its cash to buy back its own bonds and shares, and to raise its dividend.
Gazit Globe is also launching a new partnership for investment in income-producing real estate in Canada with Dori Segal, controlling shareholder Chaim Katzman's partner in founding the company, who served as its CEO in the past. Segal will resign as a director of Gazit Globe next month. The partnership will find, buy and manage properties with potential for mixed use in densely populated cities in Canada, particularly Toronto, where Segal lives. Gazit Globe will invest 60 million Canadian dollars in the partnership and hold 60% of its shares, while Segal will invest 40 million Canadian dollars and hold 40%.
Over the next five years, the partnership plans to invest some one billion Canadian dollars in buying properties, with the purchases financed by, among other sources, locally raised debt secured on the properties purchased, at customary leverage levels.
Yesterday, Gazit Globe published an offer to repurchase NIS 1.135 billion par value of its series 11 bonds (48.5% of the series) for NIS 1.338 billion, representing a 0.5% premium on Monday's closing price. Gazit Globe also launched a NIS 250 million buyback program for its shares, and declared a NIS 75 million dividend (NIS 0.405 per share), and announced that its annual dividend would rise to NIS 1.72 per share in 2020, from NIS 1.62 per share in 2019.
At the same time, Gazit Globe published its third quarter results, showing a profit attributable to shareholders of NIS 474 million, mainly thanks to a NIS 482 million revaluation of financial derivatives in the quarter.
The company raised its FFO guidance for 2019 to NIS 590-601 million from NIS 577-592 million.
Published by Globes, Israel business news - en.globes.co.il - on November 20, 2019
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