The big winners from the Sodastream International Ltd. (Nasdaq: SODA;TASE: SODA) deal are US concerns, even though the company has also been listed on the Tel Aviv Stock Exchange (TASE) for the past two and a half years and investment institutions in Israel have been holding shares in the company at least as part of a relative proportion of the Tel Aviv 35 Index. PepsiCo is buying Sodastream for $3.2 billion.
Sodastream currently has no controlling shareholder. Private equity fund Fortissimo, led by Yuval Cohen, formerly controlled the company and led its Nasdaq IPO in 2010, but sold its holdings at a large profit over the years. The fund invested $10 million in 2007 in the company, which was in difficulties, and eventually sold its share for $200 million.
Today, the largest shareholder in Sodastream is Fidelity Management & Research (FMR) with a 9.3% stake, as of the beginning of March. FMR will get $302 million in cash under the current deal. It became a party at interest in Sodastream last year when the share was at $50-55 and will make a handsome profit on its investment in the Israeli company.
Another prominent shareholder in Sodastream is Renaissance Technologies, which owned 5.4% of the shares as of the beginning of March and will receive $175 million from the acquisition. Renaissance became a party at interest in Sodastream towards the end of 2017 when the share was traded in the $60-70 range.
According to figures from stocker.co.il, which monitors holdings by investment institutions, the exposure of Israeli institutions to Sodastream in long-term savings was $363 million as of the end of the first quarter. The website wrote that the institution holding the most shares was Menorah Mivtachim Holdings Ltd. (TASE: MORA) with shares worth $144 million, following by Amitim with $50.5 million and The Phoenix Holdings Ltd. (TASE: PHOE1;PHOE5) with $40 million. Clal Insurance Enterprises Holdings Ltd. (TASE: CLIS), Migdal Insurance and Financial Holdings Ltd. (TASE: MGDL), and the teachers' advanced training funds each hold shares in Sodastream worth over $20 million.
The exposure of investment institutions through mutual funds amounted to $105 million, as of May. Psagot Investment House Ltd. held shares worth $26.6 million, Altshuler Shaham held shares worth $15.5 million, and Mor held shares worth $13.9 million. Migdal, Meitav DS Investment House Ltd., and Yelin Lapidot Mutual Funds Management each held shares with $9 million. There are also those who bet against Sodastream by taking up a short position in the company's share.
Another big winner is Sodastream CEO Daniel Birnbaum, who holds 0.6% of the company's shares with a value of $19.8 million. In addition, under his employment agreement, all of the capital remuneration that he holds will mature with the change in control of the company. At the same time, the company shareholders approved a resolution in 2015 stating that in the event of a strategic investment in Sodastream, i.e. if a third party invests at least $25 million in the company, Birnbaum will be entitled to a bonus of 100,000 options.
As a result, the Israel Tax Authority can expect to collect only about NIS 1 billion from the sale.
Published by Globes [online], Israel business news - www.globes-online.com - on August 20, 2018
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