Ahead of TASE IPO, Fattal cuts company valuation

David Fattal, photo: Alon Ron

Fattal now expects to raise NIS 340 million at a company value of NIS 3.4 billion, before money.

Just before next week's giant IPO by Fattal Holdings, controlling shareholder David Fattal has had to cut the company value for the offering by 15%, apparently due to pressure from the underwriters, led by Leader Underwriters.

Fattal's IPO is scheduled to get underway next Monday at a minimum company value of NIS 3.4 billion, before money, compared with the minimum value of 4 billion for an offering of 10% of the company's capital, as planned by Fattal. The amount to be raised has therefore been reduced from NIS 400 million to NIS 340 million. The minimum value is before a 2.5% prior commitment charge, so the value of the company for investment institutions participating in the IPO will be NIS 3.3 billion.

One reason for the lower value is the upheaval in stock markets in Israel and overseas. At the same time, sources close to the offering told "Globes" that in their opinion, despite the cut in the minimum price, there was a reasonable chance that the IPO would eventually be closed according to the higher value of NIS 4 billion. Fattal Holdings, founded by David Fattal 20 years ago, currently has 167 hotels with 32,000 rooms in 17 countries worldwide. Shareholders in the company include David Fattal (71.8%), his divorced wife Hadassah Fattal (9.65%), and Migdal Insurance and Financial Holdings Ltd. (TASE: MGDL) (18.55%). The cost of David Fattal's salary as CEO of the company is NIS 9 million annually.

Following the publication of Fattal Holdings' first draft prospectus two weeks ago, the company's management embarked on a roadshow, which was scheduled to end today. The day following the publication of the prospectus, when the mood in the stock market was still far more optimistic, a senior capital market sources told "Globes," "I haven't seen a single offering in the Israeli capital market in recent years that took place at the value cited at the beginning. The underwriters in Israel regularly play a psychological game by leaving a range for downward adjustment even before the roadshow. All of the underwriters in the market today know that it's not easy to carry out equity offerings without giving some discount to those participating in the offering."

Published by Globes [online], Israel Business News - www.globes-online.com - on February 8, 2018

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

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David Fattal, photo: Alon Ron
David Fattal, photo: Alon Ron
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