Property and Building Corp. Ltd. (TASE:PTBL) has completed the acquisition of Aaron Frenkel’s 37.22% stake in the income producing real estate company Bayside Land Corp. Ltd. (Gav Yam) (TASE:BYSD1) for NIS 3.026 billion, subject to adjustments.
Frenkel has registered a 100% return on its investment in Bayside and a huge profit of NIS 1.25 billion. Following the completion of the transaction, Property & Building has increased its stake in Bayside to 86.72%.
Property & Building is looking for a loan as HSBC Tower sales fall through
Aaron Frenkel sells Bayside stake to Property & Building
The deal was completed after Property & Building last week received a loan of NIS 950 million from Mizrahi Tefahot Bank and other financial institutions. The 12-month loan was granted at prime plus 2.5% and can be extended until the end of 2023 if necessary.
Property & Building is the real estate investment division of Discount Investments Corp. (DIC), which has a 29.9% stake in Mega Or and a 29.8% stake in Elco Holdings.
Property & Building had planned to finance the acquisition of the Bayside share by selling the HSBC tower in New York, but the sale agreement for the US building was recently canceled as buyers struggled to find the necessary financing for the transaction, forcing Property & Building to seek alternative financing. Due to all this uncertainty, Bayside’s share price fell 27% last week to provide a market value. Frenkel thus receives NIS 3.026 billion for shares that are currently worth NIS 2.372 billion – a premium of 28%. In addition, Bayside awarded a prize of NIS 400 million at the beginning of 2022, of which Frenkel received NIS 149 million.
Frenkel believes that Bayside is a quality company and would have been prepared to become a controlling shareholder if Property & Building had been prepared to divest its stake. Bayside develops and manages high-tech parks and offices, logistics centers and industrial zones.
Published by Globes, Israel business news – en.globes.co.il – on June 7, 2022.
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