The share prices of Dori Group Ltd. (TASE: DORI) and U. Dori Construction Ltd. (TASE: DRCN) are down nearly 50% today on the TASE, after Gazit-Globe Ltd. (NYSE: GZT; TASE: GZT; TSX: GZT), led by Chaim Katzman and Dori Segal, decided in effect to abandon Dori and sell the company on the TASE.
U. Dori Construction today reported that its entire board of directors had resigned, and that action was being taken to appoint new directors.
The Gazit-Globe share price is also falling following these developments. The investment in Dori is listed in Gazit-Globes' books at a value of NIS 230 million.
In his report today to a Gazit-Globe investors conference, Katzman said, "There is a point at which leadership has to say enough is enough. I am convinced that U. Dori Construction will bleed less and succeed more in business under other management. A situation has been reached in which being a deep pockets company is to our disadvantage, and in the end to the disadvantage of the company itself. The contractors, suppliers, employees, shareholders, and everyone else took maximum advantage of the deep commitment we showed. We have to put a stop to it.
"My duty is to the shareholders of Gazit-Globe, and to do the right thing for them as it appears at each point in time. It seems to me that at this point in time, nobody disputes that this is the right measure, whatever the consequences, with all the potential unpleasantness this is liable to cause.
"At the same time, it is certainly possible, as I said before, that different ownership that is leaner in properties will succeed where we failed. In the end, I believe that this change of ownership is also to the benefit of the Dori Group shareholders."
Published by Globes [online], Israel business news - www.globes-online.com - on January 14, 2016
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