However, this is a one-time opportunity on the part of Manav to control a huge real estate portfolio that it is doubtful that Gabyam’s assets will reach on its own. As a company without a controlling interest, it will be easy for Manav to carry out the transaction without regulatory obstacles of the Centralization Law, what is more, that the transaction There is expected to be a cash and stock deal. As of this moment, it is still unclear what the feasibility of the deal is, since apart from exploratory talks with the major shareholders of DSKSH, Zevida has not yet submitted an official offer with a price for DSKSH, and he has to approve the offer in the board of directors. However, Zevida In recent days, he sent messages to the DSKSH about his intention, and according to sources in the structure, he encountered no opposition.
In a time of crisis, price is of utmost importance. From the point of view of DSKSH, the transaction can improve its financial situation, which has been damaged as a result of the interest rate increases in the market. A merger with a strong company such as Mevanah will improve the financial strength and financial position of DSKSH and its subsidiary Property and Building.
This is not the first time that Mbaana wants to purchase DSKSH, and already in the past it held talks for such a purchase after the insolvency that Eduardo Elstein reached. At the same time, it held talks with the bond representative of IDB, which took over the company, talks that were revealed in “Calcalist”. In the end, at the end of 2020, those who purchased the controlling shares in DSKSH are a group of investors that includes Mega Or controlled by Tzachi Nahmias, which purchased 29.9% of the shares; Elco controlled by the Zelkind brothers, which purchased 29.8% of the shares; Rami Levy, who privately purchased 11% of the shares; and Chen Lamdan, who purchased 5%. The shares were purchased for 1.1 billion shekels, and they reflected a value of 1.34 billion shekels to the company. Today, the market value of DSKSH stands at 828 million shekels, so the shareholders lose on the investment.
The most significant move carried out under the new owners of DSKSH is the acquisition of control of the real estate company that produces Gav Yam, which to a large extent is the one that winks to the structure and Zevida. Last June, Properties and Building, the subsidiary of DSKSH, completed the purchase of businessman Aharon Frankel’s shares (37.2%) in Gev Yam for NIS 3 billion, in a deal from which Frankel came out with a profit of NIS 1 billion and Properties and Building increased to its current holding (86.7 %).
Except for the properties and the building, DSKSH has control over the cell phone company Cellcom (35.7%), the plantation and agriculture company Mehdrin (44.5%), and the high-tech investment company Elron (60%). If a deal between Mevna and DSKSH matures, Mevna is expected to sell the assets that are not At the core of its business, what’s more, David Forer, the largest shareholder in the structure (17.85%) is one of the controlling owners of Bezeq, the owner of Pelephone, Cellcom’s competitor. As of the date of Nahmias, Zalkind and Rami Levy’s entry into DSKSH, DSKSH and Assets and Building are also working to realize assets that are not in the companies’ core businesses, in order to reduce the leverage of the companies and focus on their core assets. Within this framework, DSKSH sold 10% of its holdings in Cellcom , and also sold its holding in the investment house Epsilon. In addition, Properties and Building sold significant properties that it owned – the Tivoli project in Las Vegas, Beit Properties and Beit Romano in Tel Aviv, Beit Abgad in Ramat Gan, land reserves in the Mandarin project in Tel Baruch, and an urban renewal project in Nachalat Yehuda. Also, the company entered into an unsuccessful agreement to sell its stake in the HSBC building in New York, and the company is currently conducting various negotiations for its sale.
The shares of DSK and Assets and Building have recently dropped significantly as a result of the state of the real estate market, the interest rate increases in the market and the financial situation of the companies. DSKSH’s bonds trade at a relatively high yield and the company has a debt of NIS 2.92 billion, although it has more than a billion NIS in its coffers with which it can survive 2023.
Mebane, which trades at a market capitalization of NIS 8.5 billion, is currently the fifth largest yielding real estate company in terms of market capitalization on the Tel Aviv Stock Exchange. This is after its stock fell to nearly 17% in the last 12 months, similar to many yielding real estate companies. Mebane is a company without a core of control and the dominant shareholders in terms of shareholders are the Forer family members who own shares worth NIS 1.5 billion that were purchased at a third of their current value. Forer is the owner of Neo-Pharm, which operates primarily in the field of pharmaceuticals and hygiene products, and also owns 10% of the controlling stake in Bezeq.
About eight years ago, at the end of 2015, a building, which at that time was still economically called Jerusalem, left the hands of Eliezer Fishman, who became insolvent due to large debts. Fishman’s controlling shares in the company were transferred to Bank Leumi due to a debt of NIS 2 billion. At that time, the financial situation of the Jerusalem economy was not promising. Its debts to the bondholders and the banks approached NIS 3 billion, and Laumi was unable to sell control to the parties with whom it negotiated, including the Nakash brothers and former Bank Hapoalim chairman Shlomo Nechama. Leumi was also not interested in injecting money into the company himself.
Because of this, Zevida, who was already running the company, took a dramatic step. In March 2016, he embarked on a huge fundraising of 750 million shekels, an amount identical to the company’s market value at the time, by issuing shares at a rate equal to 50% of Jerusalem Economic shares. In other words, the company doubled while putting the money into its coffers, and the shareholders who did not participate in the fundraising were sharply diluted. In this offering, Bank Leumi, which did not inject money into the company, dropped from a 26% stake to a share of only 13%. And so, economically, Jerusalem became a society without a nucleus of control, and Zevida became a powerful figure in it.
Zohar Levy took advantage of the recruitments to become a significant shareholder in the company through the public Summit under his control. He purchased shares for NIS 230 million and reached a 20% holding in the structure. Levy aspired to become the controlling owner of the company, but after failing to make a purchase offer, he sold most of his shares (12%) to Porer, the owner of New Farm, who is now, as mentioned, the largest shareholder in the structure. After that, Zevida led the company to realize assets abroad, recycle expensive debts, and merge financial and industrial buildings into one company – Mebane Group. The steps strengthened the financial structure of Mebane, which went on an acquisition spree, entered the field of rental housing and also won one tender in Sde Dov in Tel Spring.
All of these were also reflected in the company’s financial results. The January-September 2022 period ended with a 14% increase in NOI compared to the corresponding period, to NIS 538 million, and with an FFO of NIS 396 million, a 17.5% increase compared to the corresponding period. In its third-quarter reports, Mebane also updated its forecasts upward. As of the end of September, Mebane has a portfolio of 564 properties with a total value of NIS 13 billion. The occupancy rate is 94%, the debt-to-CAP ratio is low at 44%, and there is It has unencumbered assets worth NIS 5.9 billion, equity of NIS 7.7 billion, and cash and credit facilities of NIS 1.1 billion.