Mordechay Zisser has sold most of his US commercial properties less than two years after buying them, although he plans to continue real estate business in the country. Elbit Imaging Ltd. (Nasdaq: EMITF; TASE: EMIT) has sold 47 US shopping centers to a joint venture of Blackstone LP (NYSE: BX) and DDR Corporation (NYSE: DDR), BRE DDR Retail Holdings LLC, for $1.43 billion. The company owns the properties through EDT Retail Trust, a subsidiary of EPN Group LLC, in which Elbit Imaging and its subsidiary Plaza Centers NV (LSE:PLAZWSE:WLZ) own a 45.4% stake held in equal shares.
The properties' debt of $934 million will be either repaid by Elbit Imaging or assumed by BRE DDR Retail Holdings. Elbit Imaging and its units will keep the remaining $30 million in restricted and unrestricted cash, and EPN will still own two properties.
Elbit Imaging expects to close the sale in June 2012, following due diligence by BRE DDR. In September 2011, EPN received $26 million in a dividend payment from EDT.
Elbit Imaging, Plaza Centers and their partners, Menorah Mivtachim Holdings Ltd. (TASE: MORA) and Eastgate Property LLC, acquired their initial stake in EDT Retail Trust, which was traded on the Australian Stock Exchange at the time, in June 2010 for $116 million, and acquired the rest of EDT in August 2011 for an additional $242 million.
Elbit Imaging co-CEO Dudi Machluf said, "Three years ago we made a strategic decision to take advantage of the knowledge and experience gained from our international activities and to use the same successful model to create value in the US. We examined many transactions that came our way and eventually decided to invest in EDT." He added "Following completion of this transaction, we will still maintain an investment platform for continuing operations in the US," and there were more opportunities in the US for the company and its partners. The US, he said would continue to be an important part of the company's operations in the coming years."
Elbit Imaging's share price rose 11.9% in morning trading on the TASE, following the announcement, to NIS 11.90, after falling 7.7% on Nasdaq yesterday to $2.60, giving a market cap of $64.8 million. Plaza Centers' share price rose 10.9% in early trading in London to ₤0.42, giving a market cap of ₤104 million.
Published by Globes [online], Israel business news - www.globes-online.com - on January 11, 2012
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