The Israeli bourse will hold an initial public offering of its shares before the end of the year, the CEO of the Tel Aviv Stock Exchange, Ittai Ben-Zeev, said on Monday.
“We have started working on a prospectus,” Ben-Zeev said at a press conference in Tel Aviv. The exchange will be submitting a draft prospectus to the Israel Securities Authority in September, with plans to hold the share sale in November or December, he said.
The bourse plans to sell at least a 31.7% stake at a minimum valuation of NIS 551 million ($153 million), he said. If it does not manage to get that valuation the IPO will be halted, he said.
The stake sale is part of a push to draw additional investors to the exchange and make it more competitive and efficient, enabling it to become a more dominant player globally and more accessible to the public.
All Israeli citizens, because of their state pensions, have a stake in the country’s only stock exchange.
The share sale will be open to retail investors — all those who have private bank accounts in Israel — and closed initially to institutional investors, he said, so everyone will be able to be “a partner in the bourse,” he said. At the moment retail investors — as opposed to institutional investors, make up just 5% of the trading of shares in the bourse. An IPO of the TASE shares that is open only to retail investors will boost this figure, he said. “The idea is to get the public much more involved.”
The share price of the IPO will be set only at a later date.
“We don’t know at what price we will hold the share sale,” he said in an interview at the sidelines of the press conference. “I believe we will IPO above the value of NIS 551 million, but not significantly above.”
The stake sold in the IPO could be higher than 31.7 percent, depending if the current members of the exchange — banks and brokerages — decide to sell some of their 22.3% in the sale, he said.
The exchange made a net profit of NIS 14 million in 2017, excluding a one-time accounting charge.
The IPO is part of a larger restructuring of the TASE. In April, the board approved the sale of stakes to five investors including a nearly 20 percent stake to New York-based fund Manikay Partners LLC, and other international investors, a statement published by the TASE said.
Last month, the sale to Manikay and the four other foreign investors got approval from Israel’s securities regulator. Following the sale to Manikay, players in Israel’s capital markets expressed surprise at the seemingly covert way in which the TASE stakes were sold to the foreign investors.