The declines in the markets threaten the sale of Norstar to Israel Canada

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The declines in the markets threaten the sale of Norstar to Israel Canada

The sharp declines in recent days on the Tel Aviv stock exchanges are undermining the chances of the realization of recently proposed acquisition deals, especially the giant deal to acquire Norstar, the controlling owner of commercial real estate giant Gazit Globe. Israel Canada . This is what Globes has learned.

Two weeks ago, after several months of a struggle for control, Israel Canada, controlled by Barak Rosen and Assi Tochmeier, submitted a non-binding offer to the board of directors. Norstar , Headed by the controlling shareholder Haim Katzman, for the acquisition of full ownership in the company at a value of approximately NIS 2 billion and its privatization. Following the submission of the proposal, the parties entered into negotiations.

However, since the submission of the offer, there has been a significant deterioration in the local stock market, and especially in the shares of real estate companies. Thus, since the offer was submitted two weeks ago, Norstar shares have fallen by 14%. Israel Canada, the buyer in the deal, has plunged by 18% in the last two weeks and reflects the company’s current value of NIS 4.3 billion after losing about NIS 1 billion in a campaign.

Hence the deal offered by Israel Canada has become quite expensive at current market prices. The share price according to which it was proposed to make Norstar private was NIS 55.55, which is now 23% higher than its current price on the stock exchange. The company’s current market value is about NIS 400 million lower than the one on which the acquisition offer of Israel Canada is based.

Israel Canada entered an investment in Norstar at the end of January this year and currently owns about 22% of the company’s shares, which it purchased for more than NIS 300 million (most of the proceeds go to Haim Katzman himself). The outline proposed by Israel Canada to Norstar’s Board of Directors is to purchase all the company’s shares that it does not own, for a consideration in cash or a share in Gazit Globe shares (at a ratio of 1.88 Gazit Globe shares per Norstar share) at a rate of up to 50%.

Israel Canada: “Working with Discretion”

In addition, in order to turn Norstar into a private company, Israel Canada offered to repay, as part of the deal, all of Norstar’s debt to the bondholders in Tel Aviv, whose balance is estimated at close to NIS 800 million.

A source in Israel Canada mentioned that the offer submitted to Norstar is not binding and added that “if the markets are not good and unclear, nothing will be done by force. As always we will work to execute only good deals that we will profit from on the day of purchase.” He said, “All the deals that Israel Canada has made to date have been made at a large profit on the day of the deal and there will be no change in strategy this time either. We are acting with discretion and thought,” the source said.

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