Property & Building decides against NY's Lipstick Building

Lipstick Building  photo Shutterstock

The company announced that after an initial examination it had decided not to proceed.

After it was reported earlier this month that Property and Building Ltd. (TASE: PTBL) was considering the acquisition of control of the Lipstick Building in New York, this morning the company published an update stating that after an initial examination it had decided not to proceed.

The building is a 34-storey office tower on Third Avenue between 53rd Street and 54th Street. The price in the deal was to have been $51 million, while the corporation to be acquired also has $420 million in debt, which it took on when buying the property. This debt would have had to be repaid when a deal was signed or shortly afterwards.

Eduardo Elsztain is the controlling shareholder in holding company Discount Investment Corporation, which holds 68.83% of Property & Building. Discount Investment Corporation has published an offer to purchase for all of the public's holdings in Property & Building. Property & Building said that it published the preliminary announcement about the tower because of the offer to purchase for its shares, which is still pending.

In 2007, shortly before the global credit crisis, the Lipstick Building was acquired by a group of investors consisting of Manofim Finance (now Arena Group), controlled by Jacky Ben-Zaken, and Tao Tsuot, controlled by Ilan Ben-Dov, for $650 million. The buyers paid almost the entire price with credit. Within a few years, however, they got into difficulties as a result of the crisis and had to sell the property at a heavy loss.

Published by Globes, Israel business news - en.globes.co.il - on June 20, 2019

© Copyright of Globes Publisher Itonut (1983) Ltd. 2019

Lipstick Building  photo Shutterstock
Lipstick Building photo Shutterstock
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