Alrov Real Estate Under control Alfred Akirov About ten days ago, I applied to the Capital Market Authority for a control permit in the Clal insurance company, but tonight (Sunday) it became clear that the obstacle facing the acquisition of control may actually come fromSecurities Authority. Alrov said that “the staff of the Securities Authority contacted the company and asked for its consideration of the consequences of Chapter III Restricting control of companies in a pyramidal structure ‘of the Centralization Law on the transaction programming for the purchase of shares in Clal Insurance Business Holdings. To the stock exchange.
The law of centralization prohibits a second-tier company from controlling another tier company, that is, it prohibits the creation of a three-tier structure. A “stratum company” is defined in section 20 of the Centralization Law as a public company or a bond company that is a reporting corporation. Balrov explained that the Securities Authority referred to the fact that Alrov is a stratum company and so is Clal Holdings when Clal Holdings controls Clalit Insurance Company, which is a reporting corporation that issued bonds to the public.
Therefore, the company, Clal Holdings and Clalbit may each constitute a “stratum company”, within the meaning of the Centralization Law. It should be noted that in the regulations to promote competition and reduce concentration there are exceptions that could have allowed the transaction without problems, which exempts an issuer of an insurer from the definition of a stratum company, but refers to an insurer that is only a stratum company. However, the Securities Authority stated that on the face of it, this exception is therefore not relevant to Clalbit, since Clal Insurance is not a reporting corporation and therefore does not constitute a stratum company.
Since this exception is not valid in Clal’s current batch, the Securities Authority’s staff asked Alrov to explain why in its opinion the transaction would not violate the Centralization Law, which would not control a second tier company in another tier company and even ordered Alrov to publish the report to investors.
Following the Authority’s demand, Balrov explained that “the outline of the acquisition of the controlling interest in Clal (which has not yet been formulated) is inherently subject to compliance with all applicable regulations and laws.
This is a new obstacle facing Alrov, after in terms of pure centralization Alrov is not likely to run into a problem. According to the Shtrum Committee, a significant non-financial corporation and a significant financial corporation cannot be controlled by the same entity, but although Clal Insurance is defined as a significant financial corporation, Alrov is not currently defined as a significant non-financial corporation.
Alrov currently holds 15% of Clal’s shares, and it aims to reach 30% of the shares. To this end, it must obtain a control permit from the Commissioner of the Capital Market, Dr. Moshe Barkat, and Alrov submitted such a request about ten days ago.
It should be noted that the Capital Market Authority has already reviewed Alrov’s documents when the real estate company previously submitted a permit application to increase its holdings in general to 15%, a permit it did receive. The Capital Market Authority Stick to the financial data and the question of Alrov’s ability to develop Clal without harming savers and policyholders.
It should be noted that a similar request was also forwarded by the Capital Market Authority to Vishor, the digital insurance company that is already in the process of acquiring control of Ayalon. The Authority’s staff referred to the fact that Vyshor GlobalTech, the parent company, controls the insurance company Vishor and therefore is a stratum company, while at the same time Ayalon Holdings is a stratum company that controls Ayalon Insurance Company and it controls Ayalon Insurance IPOs and capital raising, which is a corporation that reports bonds to the public. Thus, the Company, Ayalon Holdings and Ayalon IPOs may each constitute a “stratum company” within the meaning of the Centralization Law.
Vishor replied to the Securities Authority that they clarified that the completion of the transaction and its execution are conditional on the fulfillment of conditions precedent specified in the agreement, by May 1, 2022. Vyshor also clarified that , Formulate the various alternatives they face regarding, among other things, options for changing the status of a stratum company to a company that is not a stratum company in the group, all subject to the ability of the parties to act.
In addition, the company stated that it is examining ways to complete the financing of the transaction, which by their nature may also have an impact on the structure of the holdings. It was further stated that Vishor reiterates that there is no certainty regarding the completion of the transaction, there is no certainty that the full approvals required for the execution of the transaction will be received, including regulatory restrictions that may apply or that the full conditions for completing the transaction will be met.
“To the extent that the company believes that there are issues that require examination or regulatory approval or by a court regarding the Centralization Law, the company will act accordingly. .