TASE offers to buy members' shares

Tel Aviv Stock Exchange Photo: Eli Yizhar

The TASE and the Securities Authority want to sell control of the TASE to a foreign stock exchange.

Three months after "Globes" reported that the Tel Aviv Stock Exchange (TASE) was looking into the possibility of buying the shares in the TASE from the TASE members at a value of NIS 400 million for the TASE, sources today informed "Globes" that the TASE, managed by CEO Ittai Ben-Zeev, had officially contacted all its members about buying their TASE shares, this time at a value of NIS 500 million.

It was also reported that following opposition by the Israel Securities Authority to the TASE itself holding its shares and its ruling that the TASE could only be a mediator in a deal, the TASE changed the format of the deal it is offering its members. The TASE is now offering a three-month option in which it can acquire the shares in the framework of a deal also involving a third party, which will buy these shares from it. This format probably eliminates the TASE's need to raise bonds in order to pay for the purchase of the shares.

Last September, "Globes" reported that the TASE was examining the possibility of acquiring the TASE members' shares, after a court had approved the change in TASE ownership structure urged by the Securities Authority and the TASE. Today, all the legal frameworks for the change in ownership structure have been completed, including an allocation of shares in the TASE to its members and employees (the latter will receive 6% of the shares in the TASE when it becomes a commercial company). It is therefore necessary for the TASE members to sell their controlling interests within several years, in the hope that someone will want to take over the TASE.

The TASE's NIS 500 million value in the proposed deal is about the same as its equity, and is also the maximum amount for which its members can benefit from the profit on their shares. Any profit in excess of this will be returned to the TASE.

Overseas parties are already expressing interest

The TASE's initiative comes after it was turned into an ordinary commercial company. The TASE and the Securities Authority hope that it will be acquired by an international chain of stock exchanges that will make the TASE part of a stronger organization. It cannot be ruled out that the acquisition of the existing TASE members' shares is already taking place in in accordance with the needs of the TASE members wishing to sell, but also in order to enable the TASE to control the process of bringing in a controlling shareholder to its liking.

This measure, together with the three-month option, shows that the TASE is negotiating with a foreign stock exchange or securities authority considering the possibility of taking over the local stock exchange. As far as is known, the Toronto and Singapore Stock Exchanges have expressed some interest in acquiring the TASE.

Published by Globes [online], Israel Business News - www.globes-online.com - on January 2, 2018

© Copyright of Globes Publisher Itonut (1983) Ltd. 2018

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Tel Aviv Stock Exchange Photo: Eli Yizhar
Tel Aviv Stock Exchange Photo: Eli Yizhar
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