The Nimrodi family is joining the trend towards selling holdings on the Tel Aviv Stock Exchange (TASE) in order to take advantage of the high prices there before the indices are updated. Late last week, a private company owned by Yaakov Nimrodi that controls Israel Land Development Company (TASE: ILDC) sold 7% of the company's shares for NIS 58 million. The price in the deal was almost NIS 30 per share, similar to the price at the beginning of that day's trading. Israel Land Development's current market cap is NIS 900 million, following a 150% surge in the company's share price over the past three years.
Simultaneously with the sale of the shares, Yaakov Nimrodi, through Yaakov Investments, agreed a swap deal with the bank that handled the sale. At the end of a period of up to two years from the date of the deal, a settlement will take place between Yaakov Investments and the bank for the difference between the price of the shares sold and their value on the settlement date (to be determined by the price at which they are sold by the buyers, entirely or in part, on that date).
Israel Land Development said that the sale of the shares "was aimed at enabling the company to meet the TASE's conditions for the minimum proportion of public holdings required for companies listed on the Tel Aviv 125 Index starting on December 31, 2017." This minimum proportion is 30% for companies on the index, and 35% for companies seeking to be listed on it. The upcoming revision of the indices is scheduled for February, on the basis of end-of-the-year figures.
Like Israel Land Development, several other real estate companies recently sold and issued shares in order to safeguard their places on the leading indices, while taking advantage of strong demand for their shares. In many of these cases, controlling shareholders and parties at interest sold some of their shares.
Arad Investment & Industrial Development Ltd. (TASE:ARAD), for example, the controlling shareholder in Isras Investment Co. (TASE: ISRS), sold 4.4% of Isras's shares for NIS 95.5 million at market prices, through a swap deal for a period of at least one year. Assaf Tuchmeir and Barak Rosen, controlling shareholders in Israel Canada ITR) Ltd. (TASE:ISCN), sold shares in the company for NIS 50 million, and also issued 2% more of its share capital. Income-producing real estate company Adgar Investment and Development Ltd. (TASE: ADGR) completed an offering of shares for NIS 110 million in recent days, in which chairperson and controlling shareholder Doron Schneidman also took part.
Following the sale of shares by Yaakov Nimrodi, his holding in Israel Land Development shares is 35%, with a value of NIS 310 million, compared with 42% previously. Israel Land Development CEO Ofer Nimrodi, Yaakov's son, holds 29% of the company's shares, with a value of NIS 260 million.
The capital structure of the company, which the Nimrodi family acquired from the Jewish Agency and Bank Leumi (TASE: LUMI) in 1989, gives the family basic shares amounting to 50% of the voting rights in the company, in addition to the share capital. For this reason, Israel Land Development last month decided to change its capital structure, and to consider possible alternatives for consolidating it. Previous attempts at consolidating the company's shares while waiving the extra rights of the basic shares failed, due to opposition by the controlling shareholders, but the company now believes that such a measure is likely to succeed.
Published by Globes [online], Israel Business News - www.globes-online.com - on December 18, 2017
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