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Tel Aviv exchange gets green light for stake sale to hedge fund Manikay

Source: Reuters

The newly privatised Tel Aviv Stock Exchange (TASE) has won approval from Israel’s securities regulator for a deal to sell nearly 20 percent of the exchange to investment fund Manikay Partners and another 19 percent to four other foreign investors.

The sale, announced in April, puts a value of 551 million shekels ($151 million) on Israel’s stock exchange, which has struggled with declining trading volumes.

The securities regulator said the deal would enable TASE to become a public company with a more diversified control of ownership and greater transparency of operations.

“This move complements the ISA’s actions to expand the public capital market and develop a market that is competitive, diverse, and accessible to the investor public,” said Anat Guetta, chairwoman of the Israel Securities Authority (ISA).

Under the deal, Manikay will acquire 19.99 percent of the exchange while 18.8 percent will be sold to Sunsuper PTY Ltd, Moelis Australia Asset Management Ltd, Dalton Investments LLC and Novo Nordisk Foundation. These four will hold 4.69 percent each.

The ISA said on Sunday a trustee had been appointed for 32.9 percent of TASE’s shares, of which 31.7 percent will be sold through an initial public offering that is expected in 2019.

Current TASE members — local and foreign banks — will keep 22.3 percent of the bourse’s ownership.

TASE, with 456 traded companies at a market value of $201 billion, demutualised last September and became a for-profit bourse and offered to buy out its shareholders.

The Tel Aviv bourse aims to become competitive, cheaper and more efficient after around 200 de-listings over the past decade and a trading volume slump. In 2017, stock trading averaged $400 million a day, up slightly from 2016 on a rise in IPOs.

Volume remained steady at an average of $407 million a day in the first half of 2018, according to TASE.

Manikay, a U.S. hedge fund with operations in London and Sydney, has been involved in a number of exchange-related transactions, including with the New York Stock Exchange, Chicago Board of Trade and the Sydney Future Exchange.