Israeli purchasing malls and places of work large Azrieli Group (TASE: AZRG) is about to purchase residential actual property growth and building firm ZMH Hammerman (TASE: ZMH). After protracted negotiations lasting a month and a half, Azrieli Group chairman Danna Azrieli, who has a controlling 56% stake within the firm, has reached settlement with institutional buyers to lift the worth of the deal by NIS 18 million to NIS 873 million.
As a part of the agreements, which ought to obtain help at ZMH Hammerman’s basic assembly, Azrieli agreed to a rise in worth in alternate for the help of the institutional our bodies that threatened to vote in opposition to the settlement. In doing so, Azrieli has eliminated the ultimate impediment on the best way to buying the corporate, which is able to add residential growth exercise to its actual property empire, and can lead to ZMH Hammerman delisting from the TASE.
Azrieli Group mentioned, “After direct and clear discussions, we reached respectful agreements that may allow the closing of the deal. As a part of the understandings, we reached an settlement that the corporate’s worth might be linked to the buyer value index from March 2025, with an addition of NIS 5 million shekels, as an indication of goodwill to finish the transfer. We respect all events concerned for his or her flexibility and dedication to the success of the deal.”
It was additionally agreed that accounting agency Ernst & Younger (EY) accomplice Yuval Ganani, who mediated between Azrieli and ZMH Hammerman, would waive about half of the brokerage price, which was imagined to be NIS 13 million, which Azrieli deliberate to pay from ZMH Hammerman’s funds.
The institutional buyers threatened to scupper the deal
The agreements between the events come after Azrieli reported in June that it had signed an settlement to accumulate management of ZMH Hammerman at a valuation of about NIS 855 million. Underneath the phrases of the settlement Azrieli was to purchase 67% of the shares of the corporate for NIS 559 million, whereas the remaining shares would stick with ZMH Hammerman controlling shareholders Haim Feiglin and Ran Ben-Avraham.
Nevertheless, the TASE rally and sharp leap within the share value of the corporate, reshuffled the deck, and led the institutional entities invested in ZMH Hammerman to demand a a lot larger worth. Opposition to the deal was led by the Brosh activist funding fund (4.9%) managed by Amir Efrati, which joined the opposite institutional entities (Phoenix, Harel and Clal), which maintain 30% of the shares.
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The truth that the Tel Aviv Development Index jumped by over 30% within the month following the launch of the Iran operation led the institutional our bodies to demand a price of about NIS 1 billion, about 17% larger than the unique worth. “We at all times thought that the worth of ZMH Hammerman must be over NIS 1 billion, even larger than the up to date worth within the cope with Azrieli,” mentioned a supply who was among the many group of opponents on the time. At one stage ZMH Hammerman’s market cap on the TASE exceeded its valuation within the deal. Then again, Azrieli resolutely declared that it had no plans to extend the valuation within the deal, even when the deal needed to be deserted. Ultimately either side compromised, with Azrieli including to the valuation.
Increasing Azrieli’s actual property empire
ZMH Hammerman, managed by Haim Feiglin, develops and builds actual property initiatives, primarily within the residential market. The corporate was based in 1997 and was floated on the TASE ten years later. By the tip of 2024, it had constructed over 10,800 residences round Israel, in addition to 356,000 sq. meters of economic, workplace and industrial house.
Over the previous yr, the corporate’s inventory has been risky, amongst different issues as a result of negotiations for the deal and the renewed curiosity of buyers in growth corporations following the Iran operation. For the reason that begin of 2025, the corporate’s inventory has risen by about 11%, finishing a leap of about 61% previously yr and is at the moment buying and selling with a market cap of NIS 829 million.
Azrieli Group mentioned after the settlement was reached. “Our entry into the world of residential growth in Israel enhances the group’s various areas of exercise and strengthens our dedication to persevering with to construct and develop the nation – a Zionist worth that has accompanied us all alongside the best way. We consider that by combining the group’s expertise and capabilities, with the experience of ZMH Hammerman, we will additional increase our contribution to the Israeli economic system and the native actual property trade.”
Printed by Globes, Israel enterprise information – en.globes.co.il – on August 6, 2025.
© Copyright of Globes Writer Itonut (1983) Ltd., 2025.
