The Ofer family is quietly planning a creative division of the family assets that will enable them to circumvent a key provision of the Business Concentration Law and keep control of both Mizrahi Tefahot Bank and the mall owner Melisron.
The law sets a December 2019 deadline for holding groups to limit themselves either to major financial holdings, like a bank, or major non-financial holdings. Until now, the markets have assumed that the heirs to the Yuli Ofer business empire would choose between holding onto Mizrahi or Melisron.
But the family is reportedly now working on a giant asset swap between their two investment vehicles – Ofer Investments and Ofer Holdings. It also involves the two siblings’ nephew Eyal Ofer, who also has a stake in the bank and mall company.
When the proposed operation is complete, the idea is to leave Liora Ofer, Yuli Ofer’s daughter, in control of Melisron through Ofer Investments, which owns 60.8% of the publicly traded company. Her brother Doron will get the family stake in Mizrahi through Ofer Holdings.
Ofer Investments said in response to the reports, “Ofer Investments shareholders are exploring various alternatives in connection with the Concentration Law. As of now, no decisions have been taken.”
In any event, sources said that the Ofers were waiting to announce any plans until after Antitrust Commissioner Michal Halperin has approved a merger between Mizrahi Tefahot, Israel’s third-largest bank, and its much smaller rival Union Bank.
Four years ago Liora Ofer won a lawsuit brought by her brother and as a result now controls 51.7% of Ofer Investments to Doron’s 15%. The rest is in the hands of Eyal through a company called Lin Holdings. Ofer Holdings is 33%-owned by Lin, with Liora and Doron each holding another 15% and the rest held in a trust.
Thus, Liora’s stake in Melisron and Mizrahi amounts today to 3.1 billion shekels, while Doron’s smaller stake in the two companies is worth just a third of that. Eyal Ofer’s shares are worth 2.85 billion. The family fortune includes other assets.