Yitzhak Tshuva is bringing Elad Israel Residences Ltd. back onto the Tel Aviv Stock Exchange (TASE), six years after delisting the company, then known as Dankner Investments Ltd. The subsidiary of Delek Real Estate Ltd. (TASE: DLKR) has made a reverse merger with Tamir Fishman Real Estate Ltd. (TASE: TFRE) in a share-swap deal.
Under the deal, Delek Real Estate will own 81% of Tamir Fishman Real Estate, which operates in Eastern Europe. Elad Israel's company value for the deal is NIS 399 million, and Tamir Fishman's company value is NIS 88 million, double its market cap.
One of Elad Israel's properties is the Bezalel Market in Tel Aviv, which Tshuva is reportedly seeking to bring in a partner. The developer also has a project in Tel Aviv Bavli neighborhood.
Tamir Fishman Real Estate director Elad Tamir said, "The basis of the decision for the merger is our goal of the good of shareholders. This deal will create value and lower the shareholders' risk. The business and financial reality in the Eastern European real estate market has greatly deteriorated in recent years, slowing the creation of value."
Closing the deal will require approval of Tamir Fishman Real Estate's creditor Israel Phoenix Assurance Ltd. (TASE: PHOE1;PHOE5), which Tshuva controls through Delek Group Ltd. (TASE: DLEKG), Delek Real Estate's sister company. At closing, all of parties at interest deals in Tamir Fishman Real Estate will be cancelled, and its officers will be fired. The company's management company, which is eligible for €2.64 million compensation in the event of the cancellation of its contract, will receive €1.5 million in cash and a 0.96% holding in the merged company.
Delek Real Estate's share price fell 1.1% today to NIS 1.46, giving a market cap of NIS 446 million. Tamir Fishman Real Estate's share price jumped 43.6% to NIS 2.59, giving a market cap of NIS 43 million.
Published by Globes [online], Israel business news - www.globes-online.com - on November 23, 2010
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