George Horesh mulls buying Ra'anana land back from Teva

George Horesh Photos: PR and Tamar Matsafi

If Horesh exercises his option, he is likely to lease the land to Amdocs, which wants to buy it.

Businessman George Horesh, who sold land in Ra'anana to Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) two and a half years ago, is likely to buy it back under rights awarded him in the sale agreement, sources inform "Globes."

If Horesh exercises his rights to buy back the land, he is likely to lease it to technology company Amdocs Ltd. (Nasdaq: DOX), which is planning to build an office campus in the area, or to another concern. Amdocs, managed by CEO Eli Gelman, announced in September that it had signed an agreement to buy land from Teva, "subject to a third party waiving its rights to this land."

Horesh, one of Israel's wealthiest people, owns Union Motors, the importer of Toyota cars to Israel, and also has substantial holdings in real estate, energy, and technology. "Globes" recently reported that Horesh was likely to buy 10% of Dalia Power Energies, which owns Israel's largest private power station, for NIS 200 million.

2.75 acres sold to SAP

Plans for the lot in Ra'anana have changed many times in recent years. The site, located in the northern Ra'anana industrial zone, is part of a huge plot acquired by Horesh in 2010 from technology company Comverse, which originally planned to build a campus there. As in the case of Teva, this planned was eventually abandoned.

The entire lot covers 55 dunam (13.75 acres). Horesh sold 11 dunam (2.75 acres) of it to software giant SAP for NIS 40 million. Teva, which bought the rest in 2015 for NIS 200 million, planned to move from Petah Tikva to Ra'anana, and to consolidate its activities at other locations in Israel in one central place, planning thereby to save millions of dollars a year in rent. Teva even selected the Electra Ltd. (TASE: ELTR) and Tidhar Group constructions companies to build its new headquarters at an estimated cost of NIS 1 billion.

Teva suspended construction of the new campus in early 2017, however, as part of its efforts to streamline and cut costs, and sold the land last September. In Teva's recently published third quarter results, it posted a $42 million decrease in value relating to real estate in Israel following the sale of the land in Ra'anana. Like Comverse and Teva before it, Amdocs stated in its announcement two months ago that it expected to use the land purchased for a new campus that would provide an advanced optimal work environment fulfilling the needs of Amdocs Israel and its employees and supporting the company's future growth.

Most of Amdocs's activity in Israel is in Ra'anana, and it also has activity in Sderot, Haifa, and Nazareth. Amdocs is currently considering alternatives for developing and building the new campus, including ownership and long-term leasing.

As of now, Amdocs is renting a property at Ra'anana Junction belonging to REIT 1 Ltd. (TASE:RIT1)(60%) and its partners, San Gold Resources and Sunflower Sustainable Investments Ltd. (TASE: SNFL). Several months ago, the companies announced the extension of Amdocs's lease on the property, following a period during which Amdocs actively searched for other properties in the area.

The previous lease, which was due to expire in 2019, was replaced by a new 10-year lease starting in July 2017. At the same time, Amdocs has an escape clause with five years notice valid until June 2022. Under the terms of the original lease, Amdocs paid NIS 68 million a year in rent.

Vitania and Carasso are getting financing

As originally reported in "Globes," before its crisis worsened, Teva recently entered advanced negotiations to move its headquarters to an office project to be built by Vitania Ltd. (TASE:VTNA.B1 and Carasso Real Estate. Vitania confirmed the report last month, and reported that together with Carasso Real Estate, it was negotiating with Teva "on a long-term lease, on terms yet to be agreed between the parties, on 40,000 square meters of space and parking spots in a project that the companies plan to construct in Kiryat Arie, Petah Tikva."

Shortly before that, Vitania acquired from Carasso Real Estate 50% of the ownership rights to the lot for NIS 68.5 million. The parties also contracted an agreement to develop the land and construct buildings for business. SGS Building Company, owned by Ehud Samsonov and Yaron Shemie, who are also among the controlling shareholders in Vitania, will manage construction of the project.

The two companies today announced that they had contracted an agreement with a bank for a two-year NIS 100 million loan relating to the land, bearing 3.1% annual interest (prime + 1.5%), to be repaid in installments every three months.

Published by Globes [online], Israel Business News - www.globes-online.com - on November 14, 2017

© Copyright of Globes Publisher Itonut (1983) Ltd. 2017

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George Horesh Photos: PR and Tamar Matsafi
George Horesh Photos: PR and Tamar Matsafi
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