The Tel Aviv Stock Exchange will sell an almost 20 percent stake to a New York based fund, Manikay Partners LLC, in a bid to boost trade and attract more companies to list shares on the bourse.
The board of directors of the exchange on Monday approved the sale of stakes to investors including Manikay, the public, and other international investors, a statement published by the Stock Exchange said.
TASE’s agreement with Manikay values the stock exchange at NIS 551 million ($157 million), the statement said. Manikay has experience and expertise in the global exchange industry, and it has invested and has been involved in a number of leading exchanges worldwide, the statement also indicated.
Some 30 percent of the shares of the exchange will be issued to the public through a direct placement, the statement said, and several institutional strategic entities will acquire an added 21.8 percent stake. The current shareholders and the TASE employees together will hold a 28.3 percent stake on Israel’s only exchange.
The share sale to the public is expected to take place in the last quarter of 2018, the statement said.
The exchange has been suffering from an outflow of companies — some 200 companies have delisted from the exchange over the last decade, many citing the burdensome regulatory environment — and a slump in trading volumes.
The sale of a TASE stake was made possible after the exchange demutualized, becoming a for-profit organization last September, and changed its ownership structure. Becoming a for-profit organization entitles the TASE to distribute profits and issue shares to the public, which it plans to do on its own exchange in 2019. It also enabled the exchange to offer to buy out its existing shareholders.
“The Israeli public is entitled to benefit from the growth and success of the Israeli economy. TASE is the most suitable platform for sharing this success with the public,” said Ittai Ben-Zeev, TASE CEO, in the statement. “We believe the entry of international investment groups with extensive experience and in-depth understanding of leading global exchanges, combined with significant share held by the public, is the most appropriate structure for the local stock exchange and one that would support its continued development and growth.”
Manikay sees the investment in TASE as a “long-term strategic partnership” and intends to make its knowledge and experience available to management and to provide access to Manikay’s resources, deal flow, and network of contacts in the global exchange industry, the statement said.