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Frenkel-owned Equity Finance, through which it held Gev-Yam shares, will hold the shares until April 2022 and will enjoy an additional dividend of approximately NIS 80 million. Properties and Building will hold 82% of the company’s shares at the end of the move. After that, Properties and Building is expected to realize the balance of its holdings and merge with the parent company DSKS.
On behalf of Properties and Building, he led the negotiations with Frenkel Doron Cohen, CEO of DKS. “We have a very clear plan: to focus on income-producing properties in Israel, reduce debt and eliminate layers,” said Cohen. , The controlling owner of Mega Light; Brothers Mikey and Danny Zalkind, controlling owners of Elco; And Rami Levy, the controlling owner of Rami Levy Sycamore Marketing. As part of the increase in its share, it will make an asset and building a purchase offer to the shareholders, which it is obligated to make in order to rise above 45%.
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Doron Cohen
(Photo: Amit Shaal)
For about a year and a half, there was a struggle for control between Frenkel and the shareholders of DSKS and Properties and Building, with each party increasing its share to achieve a larger holding of shares. Gav Yam shares of Clal Insurance and Meitav rose to 44.5%. This move provoked a lot of passion on both sides and led to a lot of tension and accusations below the surface. In New York, a Tivoli project in Las Vegas and a property on Locksmith Street in Tel Aviv.
After Saturday, close to midnight, the deal was signed and first revealed on the Calcalist website, Frenkel sounded reconciled and relaxed: “The deal is good for everyone. I wished the buyers great success. This is a super super good company, which will double itself within a few years, both in Avitada (cash flow operating profit) and revenue. It builds more buildings each year and will reach 2 million square meters of properties.
Who has the deal better? For buyers or sellers?
“In another five years, we will be able to analyze who was right. In the meantime, Brock is coming to Tzachi Nachmias and the Zalkind brothers on the deal.”
The shares Frenkel began to collect during the corona crisis in the second quarter of 2020 when the shares of real estate companies in general and income-producing real estate in particular, fell sharply in light of the huge decline in the activity of malls and offices. He began buying shares at NIS 19 and NIS 20. In July 2020, Gev-Yam reported that Frenkel reached a 8.5% holding in the company after purchasing 81,000 shares for NIS 365 million. In November 2020, he increased his share when he purchased shares and options from Migdal Insurance by NIS 940 million (15% from Gev-Yam) and increased to a 23% holding. Frenkel continued to increase its stake in Properties and Building, which held 29.9% of Gev-Yam shares, after reducing its holding by a sharp rate in light of the requirements of the Centralization Law.
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Aaron Frenkel. “In five more years we will be able to analyze who was right”
(Photo: Wikipedia)
Gev-Yam was defined as a company without a controlling interest, in light of the fact that it was the third company in the pyramid scheme of Eduardo Elstein, the previous controlling shareholder in IDB and DSKS. Frenkel’s acquisitions were made during the Elstein era, which apparently gave him the blessing of the road before he lost control of IDB to the bondholders, who sold it to the Nachmias-Zalkind group. The pyramid, which became a society without a nucleus of control. Now, Properties and Building is expected to take financing of close to NIS 1 billion to finance the transaction from an institutional or banking entity, and at the same time realize its holdings in the real estate sector. Its debt volume after the transaction will be NIS 3 billion, The value of the shares of Properties and Building in Gev-Yam after the deal with Frenkel will reach NIS 6 billion. The only property that Properties and Building is considering leaving is the urban renewal company and it is also in contact with the sale of the development company in Israel, Neve Gad. DSK is aiming to sell Elron, Epsilon and also Cellcom in the next two years, after praising the communications company.
During the struggle for control, Frenkel managed to stand behind the appointments of Eldad Fresher and Yuval Bronstein as directors (Fresher as chairman) in Gev-Yam, while Properties and Building found itself without representation on the board.
On the investment in Gev-Yam: “I intended to stay and take financing for ten years. I wanted the company. I could only dream of building such a company. Can anyone paint Picasso for example? It is impossible. He is no more.”
Did you get into it as a strategic investment?
“Absolutely. I was going to stay and take financing for ten years. But everyone and his luck is. I wanted this company. I could only dream of building such a company. It is very difficult to build such a thing. Can someone paint Picasso for example? Impossible. He is no more. You can build a new seafront. “
How were the negotiations with properties and the building conducted?
“There were 2 forces, and it was clear that either I lead or they lead. We behaved with dignity. Even when you go up to the game in the arena you behave professionally and respectfully. There were no situations of shouting. Everyone had their interests. Just as they wanted to buy me, I wanted to buy “Until the last day, I offered to buy them.”
On the negotiations with properties and building: “We conducted ourselves with dignity. There were no shouts. Just as they wanted to buy me, I wanted to buy them. Until the last day I offered to buy them “
You did not try to increase your share and stopped by 37%. Why?
“Because what was the benefit of that? If I went up to 44.5%, any further increase would take the company out of trading. Each party should be happy with its share.”
Was there a partner you wanted to bring in?
“There were many who were interested in joining me at sea. Americans and others, very large, among the leaders in the field, who wanted to enter.”
Why did you not manage to reach understandings?
“There was talk of it. It didn’t work out.”
Frenkel’s main company is Loyd’s International, which invests in aviation, real estate and energy. In addition, Frenkel owns a huge company that specializes in the sale and lease of aircraft and the sale of executive jets. Equity Finance is a sister company, investing in a number of companies. Of real estate properties around the world.
Frenkel surprised when he informed the Tamar partnership that he holds an option to purchase half of the share that Mubadallah buys from Abu Dhabi from Delek Drilling in the reservoir. Mubadallah buys 22% for $ 1.1 billion and Frenkel will buy half of the stake.
What are your ambitions now?
“Rest a bit. I did not sleep tonight. In life my ambition is to create, to be creative. To provide a livelihood for families, for people. I donate tens of millions of shekels a year. .
You have the option to purchase a 11% stake in Tamar. Are you interested in oil and gas?
“Oil does not interest me. In terms of gas, Tamar is an interesting return deal. At this point I do not aspire to buy more shares. Just exercise the option I have.”
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