Group Ashtrom Improves its offer to acquire public holdings in the shares of the subsidiary, Ashtrom Properties, And once again postpones the expiration date of its takeover bid, with the aim of successfully completing it. The proposed improvement is a premium of approximately 14% on the price of Ashtrom Properties’ share on the stock exchange and an additional consideration of approximately NIS 170 million for shareholders from the public.
Infrastructure and Real Estate Group Ashtrom Currently holds 54.34% of the shares of the subsidiary, Ashtrom Properties, and the remaining shares (45.66%) are held by the investing public. About a month ago, the Ashtrom Group submitted an offer to exchange shares for shares Ashtrom Properties Held by the public, however a surge in the share of Ashtrom Properties that came as a result of the offer, made the takeover bid unattractive for the shareholders from the public.
As of yesterday, the Ashtrom Properties share was traded at a price of NIS 15.98 per share, reflecting a value of NIS 633 million for the public holdings in the company, after a monthly jump of 27% in the stock in response to the takeover bid. The Ashtrom Group is now offering to purchase these shares in exchange for 17.818 million shares of its own, with a current market value of NIS 722 million.
This is an additional consideration of 4.19 million shares of the Ashtrom Group to the public shareholders of Ashtrom Properties, which reflects an additional consideration of 31% to the initial offer worth NIS 170 million, according to current market values. Upon the public’s response to the tender offer, Ashtrom Properties’ shares will be deleted from trading and it will become a wholly owned subsidiary of the Ashtrom Group.
The Ashtrom Group is currently traded at a market value of NIS 3.35 billion, so that the success of the takeover bid will also bring with it an increase in the company’s market value to NIS 4.1 billion and will also increase the company’s equity accordingly. The deadline for accepting the offer has been postponed from today (Monday) to next Thursday.
Ashtrom Properties is engaged in income-producing real estate for industry, commerce, hotels and offices, and in initiating real estate projects for offices and commerce. Following the recent jump in its share, the company is traded at a market value of NIS 1.4 billion, reflecting a capital multiplier of 0.81. However, the current share price still reflects a negative return of about 25% from the beginning of 2020.
In the first half of 2020, Ashtrom Properties’ revenues grew by close to 30% and reached NIS 165 million, while showing an improvement in income from real estate rentals and sales of office space, but it failed to improve its gross profit margin after its negative valuation. Its assets, mainly due to the corona crisis, and a negative change in financing items, also due to the crisis, the net profit presented by Ashtrom Properties for the first half of the year by 90% to NIS 6 million, after a net profit of NIS 72 million in the corresponding half last year.
The parent company, the Ashtrom Group, is currently traded on the stock exchange at a market value of NIS 3.35 billion, after its share has lost about 20% of its value since the beginning of the year. In addition to the income-producing real estate activity concentrated in Ashtrom Properties, the Ashtrom Group is also engaged in building and infrastructure contracting, residential construction initiation and the production of construction raw materials. A full purchase submitted to it by the Ashtrom Group.
Since then, Ashdar has ceased to be a public company, but remains a reporting company, since its NIS 738 million face value bonds are still traded on the stock exchange. Ashtrom Properties will also remain a company that reports whether its tender offer will be completed successfully, since the bonds it previously issued in the amount of NIS 1.8 billion will continue to be traded on the stock exchange.
The Ashtrom Group ended the first half of the year with a moderate erosion of about 2% in its revenues, which amounted to NIS 2.25 billion, while its net profit shrank by more than 50% and amounted to NIS 91 million. The company is controlled by the Nussbaum, Giron, Mashorer, Robin and Lifshitz families.
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