Everything is personal: last March it seemed as if a long war had come to an end. The Israel Canada real estate company, controlled by Barak Rosen (CEO) and Assi Tochmeier (chairman), then signed a deal in which it buys its shares (12.9%) in Clal Insurance Real Estate controlled by Alfred Akirov (79%) from Clal Insurance. . Israel Canada paid NIS 128 for each share, a modest premium of 3% relative to the market price at the time, and Clal Insurance received NIS 382 million in total.
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This move marked a long-running battle, during which Clal Insurance refused to approve a stakeholder deal concerning Alrov’s subsidiary, Luca (80%), which operates in the field of luxury hotels in Europe. When Luka was established, Georgy Akirov, the son of Alfred Akirov, received 15% of its shares, and over the years Alrov alone provided the financing to the company, NIS 2.4 billion, also for Akirov Jr.’s share. Over the years, in light of a change in regulation, this transaction was subject to approval as a stakeholder transaction, but Clal Insurance refused to approve it. Meanwhile, Alrov itself became a shareholder in Clal Insurance last year, and today it is also its largest shareholder (15%) and will apply for a control permit. Some have argued that the entry of Alrov Real Estate into Clal Insurance is revenge for the same refusal.
Indeed, recently, and after Clal Insurance came out of Alrov, the deal was approved. But it is clear that the precipitation remains. The deal signed between Israel Canada and Clal Insurance includes an unusual and very personal clause: a kind of fine that will be imposed on Israel Canada if it sells its shares in Alrov to Akirov himself: ” “Or a full takeover bid is made to Alrov and the company sells the shares sold or part of them, the company will pay the seller half of the difference between the price per share in the sale transaction and the price in the purchase transaction.” In other words, Israel Canada will transfer to Clal Insurance half of its profit from the sale of Alrov shares, if – and only if – the buyer is Akirov himself. Israel Canada reported this section, in a joint report to it and Alrov; Clal Insurance did not report it because it is not required to do so.
And this is not about small money. Alrov’s share price currently stands at NIS 194.5, while Israel Canada paid NIS 128 per share for its share. This is a gap of 52%. The value of Alrov Real Estate’s shares in Israel Canada (2.98 million shares), purchased from Clal Insurance, currently stands at NIS 580 million. That is, if Israel Canada sells all its shares today, its total profit will be NIS 198 million, and it will be required to transfer to Clal Insurance almost NIS 100 million.
This is an amount that Clal Insurance could have met with even earlier. As Akirov revealed in an interview with Calcalist a week ago, about a year before the deal was signed with Israel Canada, he offered Clal Insurance to buy its share in Alrov for NIS 177 per share, and for a total consideration of NIS 528 million. In other words, Akirov offered NIS 145 million more than the amount offered by Israel Canada. According to Akirov, at the time Clal Insurance rejected the offer, as, she said, the shares were not for sale; But later she decided to sell them to Israel Canada.
As revealed in “Calcalist”, following the publication of the information in question by Akirov himself, a request was submitted to the Tel Aviv District Court this week for the disclosure of documents before filing a derivative claim; This is due to Clal Insurance’s decision to sell Alrov’s shares to Israel Canada, even though it had a higher offer than Akirov. “Apparently, against the background of a dispute between Akirov and Clal Insurance, officials in general preferred to prefer an offer lower than Akirov’s offer and cause the company huge losses,” the request said. The application was filed by attorneys Yuki Shemesh and Amit Manor on behalf of a shareholder in Clal Holdings, the public parent company of Clal Private Insurance.
To this cauldron must be added the fact that Akirov was preparing to apply to the Capital Market Authority to obtain a control permit for Clal Holdings, in order to increase its holding by 30%. If he does become the controlling shareholder, it will be the first time since 2013, when the controlling shareholder was Nochi Dankner, that the insurance company has a controlling shareholder. According to Akirov, he has received positive indications from the regulator as to his chances of getting the permit, and to a large extent there is “Akirov standby” in general insurance. The spotlight is mainly on the question of the future of CEO Yoram Naveh and chief investment officer Yossi Dori in the company, since there is quite a bit of precipitation between them and Akirov.
Clal Insurance and Finance responded: “The issue of the sale of Alrov shares is in legal proceedings, so we are prevented from commenting.”
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