U.S. Property Company Hertz Plans Bond Issue in Israel of Up to $150 Million

Business in Brief | Teddy Sagi seeking to sell Brack stake just six months after he bought it ■ Hauser urges tax breaks to encourage stock market investment ■ Tel Aviv stock ends lower for first time in eight sessions

Tel Aviv Stock Exchange.
Yael Engelhart

U.S. property company Hertz plans bond issue of up to $150 million

Hertz Investment Group, which invests in office properties in smaller American cities, will probably be the next U.S. real estate company to sell bonds for trading on the Tel Aviv Stock Exchange. The company is planning to issue somewhere between $100 million and $150 million in debt due between 2021 and 2026. No rating for the bonds has been set yet, but sources said given the company’s $379 million in cash it should get a high rating. Like many of the other U.S. property firms that have raised debt capital on the TASE, Hertz has set up a company to list the bonds, Hertz Properties Group Holdings, which will control 25 buildings in the parent company’s portfolio worth $790 million. About 30 U.S. companies have issued bonds in Tel Aviv since 2012 to take advantage of low interest rates. Over the weekend it was reported that the co-working company WeWork was eyeing a bond issue in the hundreds of millions of shekels. (Guy Erez)

Teddy Sagi seeking to sell Brack stake just six months after he bought it

Just six months after he bought a controlling 44% stake in the property investor Brack NV, Israeli-UK entrepreneur Teddy Sagi is looking to sell. TheMarker has learned that Sagi is seeking 440 shekels ($125.60) a share for the stock, which values Brack at 3.3 billion shekels. That’s a 10% premium of Brack’s market price as of Monday, which closed nearly unchanged at 398.90 shekels, and 27% more than he paid for the stock. At that price Sagi would be getting 1.4 billion for the share in Brack, which invests in West German real estate, earning him a profit of between 250 million and 300 million shekels. Tomer Jacob, the UBS Israel banker who is managing the sale, is trying to interest German investors in the sale. Sagi, who has a net worth of about $2.9 billion, according to the Bloomberg billionaires index, took the market by surprise when he bought control of Brack last June. (Eran Azran and Michael Rochvarger)  

Hauser urges tax breaks to encourage stock market investment

Shmuel Hauser, chairman of the Israel Securities Authority, said on Monday that the government should offer generous tax breaks to encourage stock market investing. “Tax reductions are a game changer that we really want to help the public capital market. The time has come to balance the equation and offer tax benefits as a way of offsetting transparency requirements and regulatory costs,” he said, noting that just 20% of the 3.3 trillion in financial assets held by Israelis is invested in the bourse. One option, he suggested, is to exempt stock market profits up to 60,000 shekels ($17,100) annually and/or reduce the capital gains tax to 15% from 25% to coax investors to put funds into securities. A third idea was to halve the tax on gains from the sale in the bourse of stock by controlling shareholders, a move that would increase the supply of shares in the Tel Aviv Stock Exchange. (Shelly Appelberg)

Tel Aviv stock ends lower for first time in eight sessions

Financial services led Tel Aviv shares lower for the first time in eight sessions on Monday. The TA-35 and TA-125 indices both finished about 0.3% lower at 1,435.86 and 1,316.11 points, on turnover of 1.25 billion shekels ($360 million). Clal led insurance stocks lower, falling 4% to 65.84 after reporting a 23 million shekel third-quarter loss due to a write-down connected with low interest rates. Even Menora Insurance, which posted a 44% rise in net to 102 million shekels, fell 0.3% to 45.60. Volume leader Bank Hapoalim dropped 2.4% to 23.43 and Bank Leumi shed 1.8% to 18.81.  Mall operators suffered a second day of losses amid reports Amazon may launch Israel operations. Azrieli Group slumped 1% to 184.60 and Melisron fell 1.4% to 161.20. Bezeq shares, however, rallied, advancing 4.8% to 5.16 after the Calcalist financial daily said four funds are interested in buying control of the telecoms company from Eurocom. (Shelly Appelberg)