MPI Signs Deal to Acquire Control of Gmul Investments

Mediterranean Properties & Investment (MPI), controlled by the Yona family, signed a $125 million deal Thursday night to acquire control of Gmul Investments from the Trump brothers, Eddie and Jules.

So far, Gmul has been controlled by the Trump brothers (no relation to Donald Trump), and Yakir Gabbay, who together held 65 percent. Under the deal, their stock will be transferred to a new company that is to be set up and controlled by MPI (70 percent) and the Trump group (30 percent). Thus, with a 70 percent stake in a company that controls 65 percent in Gmul, MPI will hold 45 percent in Gmul.

To enable control of Gmul to be sold to MPI, the Yona family, which held 44 percent in MPI, had to disconnect itself from Shamrock, which also held 44 percent in MPI. The reason was the tension between Bank Hapoalim, which lent MPI the money for the Gmul deal, and Shamrock. The bank has had to make extensive provisions because of a loan it made to Shamrock to acquire a 50 percent stake in Pelephone from Motorola.

Shamrock has now sold its stake in MPI, as well as its share in the central bus station in Tel Aviv, to Building and Assets Company Mishor Hachof Ltd. (Marlaz) in a $20 million deal. Marlaz is owned by the Yona family and by Assaf Barazani.

The $300 million loan that Hapoalim gave the Trump brothers in order to buy their stake in Gmul in 2001 will be reassigned to the new corporation. The loan, which so far was nonrecourse, will from now on be guaranteed by MPI - so that the bank will have improved the terms of the loan.