Arison to Sell 26% Holding in Route 6

Housing & Construction's stake in the Trans-Israel Highway - Route 6 - in final stages of sale.

After 15 months of arduous negotiations which often verged on the brink of collapse, the sale of Housing & Construction's stake in the Trans-Israel Highway - Route 6 - is expected to be finalized within days.

The buyers, a consortium of institutional investors, are poised to buy the 25.5% stake belonging to Shari Arison's Housing & Construction for somewhere between NIS 700 million and NIS 720 million. The consortium is lead by the Israel Infrastructure Fund and includes Leumi Partners, Harel and the Amitim pension fund.

The new price is 7% to 8% lower than the NIS 770 million sum agreed to in the original deal in September 2011; the new investors demanded that the agreement be reopened.

The acquisition will lift IIF's holding in the toll road's operator, Derech Eretz, to 51%. The remaining 49% is controlled by the Noy Infrastructure and Energy Fund, a major competitor of IIF's.

As part of the agreement, IIF commits to handing over the planned widening of the toll road to Solel Boneh, a subsidiary of Housing & Construction. The maintenance and paving contracts for the highway in the remaining 17 years of its franchise license are estimated at NIS 1.5 billion and Solel Boneh will get first dibs.

The state sold its option to buy 49% of the highway in 2011, which Noy bought for NIS 1.4 billion. The original price of the IIF deal was set at this same value, which would have given an 8% annual return after inflation, but which was considered too low by the investors.