Two days before the expiry of the option it received from its members for finding a strategic purchaser for a controlling stake (72%), it turns out that the Tel Aviv Stock Exchange (TASE), headed by Ittai Ben-Zeev, failed to find the purchaser it sought. The TASE has announced that it will sell 19.9% of its shares to US investment fund Manikay Partners at a valuation of NIS 551 million. At the same time, "a number of international investors" will buy a further 51.8% of the shares in the stock exchange.
Of the shares to be bought by the additional investors, shares representing at least 30% of the TASE will be deposited with a trustee until they are offered to the public. At the end of the process, these additional investors will remain with holdings representing 21.8% of the TASE.
The TASE also stated that the stake of at least 30% will be offered to the public directly "without investment institutions" in the final quarter of 2018. At the end of the process, the stock exchange members who are not selling their shares through the option given to the TASE management will therefore hold 22.3% of the shares, with TASE employees holding a total of 6%, to be distributed to them in accordance with length of service.
In the past few months, Ben-Zeev unsuccessfully sought an overseas stock exchange that would buy control of the TASE as a strategic acquisition. On the forthcoming public offering of shares in the TASE, which before now had been spoken of as taking place only in 2019, he comments, "The Israeli public should benefit from the success of the Israeli economy and its growth. The stock exchange is the most appropriate platform for the public's participation, and therefore there is nothing more right than that a substantial portion of it should be offered to the public."
The TASE says in its announcement that Manikay Partners "has a wealth of experience and special expertise in stock exchanges and it has invested and been involved in several leading stock exchanges around the world."
The agreement signed by the TASE follows the mandate it received in January this year from a majority of the current shareholders - the banks and investment houses that are stock exchange members - authorizing it (at its request) to act as an intermediary in a deal for the sale of their shares in the stock exchange to a third party. The shareholders gave it an option for three months, due to expire in two days' time, on April 18. During this time, the TASE sought a purchaser among leading stock exchanges and international stock exchange networks, but none materialized.
The law permitting the change in the structure of ownership of the TASE stipulates that the TASE members, who are its current shareholders, will be allowed to benefit from profits on the sale of the TASE only up to a valuation of NIS 500 million. Any consideration above that amount will not go to the current shareholders.
Published by Globes [online], Israel business news - www.globes-online.com - on April 16, 2018
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